Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

HUMBER BRIDGE BILL (By Order)

Third Reading deferred till Monday next.

CITY OF LONDON (VARIOUS POWERS) BILL [Lords]

Second Reading deferred till Thursday next.

Oral Answers to Questions — COLONIAL TERRITORIES

Commonwealth Day

Mr. Biggs-Davison: asked the Secretary of State for the Colonies how Commonwealth Day was celebrated in the Colonies, Protectorates, Protected States, Trusteeship Territories, and other dependencies; and whether he will make a statement.

The Under-Secretary of State for the Colonies (Mr. Julian Amery): Commonwealth Day has been widely celebrated in Colonial Territories, particularly among school children and young people. The message of the President of the Commonwealth Day Movement was read out at youth rallies, and similar events, and sports days and other functions were arranged.

Immigrants

Mr. G. H. R. Rogers: asked the Secretary of State for the Colonies how many immigrants from the Colonies have arrived in this country during the last six months; and what steps have been taken to encourage them to live in areas best fitted to provide them with homes and employment.

Mr. J. Amery: The estimated total of arrivals from all Colonial Territories in the six months ending 30th April was some 11,500; for the same period the estimated total of departures was some 7,500. The net intake was thus some 4,000. These figures include students and temporary visitors.
The local offices of the Ministry of Labour endeavour to place immigrants in the most suitable areas. In particular, information about employment prospects is given to the Migrant Services Division of the Commission for the West Indies. This provides intending immigrants from the Caribbean territories with guidance about relevant aspects of conditions in the United Kingdom.

Mr. Brockway: Can the hon. Gentleman say how many of this small number are women and families who are joining men who have come to this country?

Mr. Amery: I cannot say offhand, but I will certainly look into that point and let the hon. Member know.

Mr. Fisher: I hope that my hon. Friend will be able to follow up the question of the hon. Gentleman. Do these researches confirm that the latest figures for West Indian immigrants to this country reveal a higher percentage of women and children in relation to men than in previous years, and, if so, would my hon. Friend agree that this is a welcome trend in achieving a more balanced migrant population and, consequently, in lessening the friction arising from the association of coloured men and white girls?

Mr. Amery: I will certainly look into the point. It is also the case that the estimate I have given is about one-third of the estimate of the previous six months.

Welfare Workers, North Kensington

Mr. G. H. R. Rogers: asked the Secretary of State for the Colonies whether he will appoint, either on his own authority or in conjunction with the West Indian Government, more welfare workers to the North Kensington area.

Mr. J. Amery: My right hon. Friend has no authority to appoint welfare workers in North Kensington. The


appointment of such workers by authorities in the United Kingdom is a matter for local authorities.
But the Commissioner in the United Kingdom for The West Indies, British Guiana and British Honduras, has expanded the Migrant Services Division of his Office to promote the welfare of immigrants both in North Kensington and in other areas where there are concentrations of West Indian immigrants.
The Commissioner has recently appointed four regional community development officers, two based on London, and the other two on Birmingham and Sheffield to assist the integration of West Indian immigrants into the local communities. My right hon. Friend and I are, of course, in close touch with the Commissioner.

Mr. Rogers: Is four the total of the increase during the last six months or so?

Mr. Amery: My impression is that it is an increase of four.

Oral Answers to Questions — KENYA

Prisoners (Treatment)

Mr. Stonehouse: asked the Secretary of State for the Colonies how many affidavits have been forwarded to him from European ex-prison officers or ex-prisoners with detailed descriptions of allegations of ill-treatment of Africans in Kenya prisons and detention camps.

Miss Vickers: asked the Secretary of State for the Colonies whether he will inform the House of the results of the investigation into the affidavit by Mr. V. C. Shuter, a Kenya prison officer, and make copies of the report available to hon. Members.

The Secretary of State for the Colonies (Mr. Alan Lennox-Boyd): Four affidavits have been sent to me. Investigations into the allegations contained in three of them are not yet complete, but I have now received copies of the report into Mr. Shuter's allegations, which shows them to be almost entirely without foundation. Since the report is too long to summarise here, I am placing copies in the Library, and will also send a copy to my hon. Friend and any other hon. Member who so wishes.

Mr. Stonehouse: Is it not the fact that investigations into Mr. Shuter's allegation revealed serious ill-treatment of detainees at Manyani and, in view of this, will the Colonial Secretary arrange for the fullest possible public inquiry into the allegations made by Major Bird and Captain Law?

Mr. Lennox-Boyd: The investigations published in the report now laid before the House show how thorough were the inquiries and how almost entirely unfounded were the charges on which hon. Members opposite based their case in the debate on 24th February.

Detention Without Trial

Mr. Foot: asked the Secretary of State for the Colonies to what extent it is still the intention of the Kenya Government, as announced by the Governor in his speech to the Kenya Legislative Council on 4th November, 1958, to enact permanent legislation under which persons will continue to be imprisoned or restricted without trial after the present state of emergency has been declared at an end; whether it is still his intention to establish a settlement at Hola for this purpose; and whether he is now able to give any particulars of the proposed legislation.

Mr. Lennox-Boyd: Detention and restriction without trial will continue for so long as they are strictly required by the exigencies of the situation in Kenya. The legal provisions for this purpose are still under consideration. Those who have to be held will be kept at Hola, because in this area it is possible to allow them the maximum personal liberty without danger to security.

Mr. Foot: Is it not a fact that in his speech on 4th November His Excellency the Governor foreshadowed permanent legislation for detention without trial? Is not this a new and extremely sinister departure from what has hitherto happened in any Colony for which we are responsible?

Mr. Lennox-Boyd: There is nothing sinister in this, it is related solely to the preservation of law and order in Kenya. I would be very ready to place in the Library the statement that His Excellency the Governor actually made.

Ex-Senior Chief Mbiyu Koinange

Mr. Stonehouse: asked the Secretary of State for the Colonies if ex-Senior Chief Mbiyu Koinange will now be released from restrictions in Kenya to enable him to join his sons in Great Britain.

Mr. Lennox-Boyd: I have discussed this with the Governor, who would be ready to agree that in this exceptional case ex-Senior Chief Koinange, who is a very old man, might be permitted to join his sons in this country if he wished and if the medical authorities considered that at his advanced age he could safely do so.

Mr. Stonehouse: May I thank the Colonial Secretary for that concession? May I hope that this will bring to an end the vindictive treatment that this old man has received.

Mr. Lennox-Boyd: I could not allow the charge of vindictive treatment to pass unnoticed. I have nothing to add to the Answer which I have given.

Education

Miss Vickers: asked the Secretary of State for the Colonies the amount of money spent on European, Asian, and African education in Kenya in the financial years 1956–57, 1957–58, and 1958–59, and the estimated amount to be spent in 1959–60.

Mr. J. Amery: I am obtaining this information and will circulate a further reply in the OFFICIAL REPORT.

Miss Vickers: Does not the Undersecretary of State think that one of the best ways of improving race relations is better education? In view of the shortage of teachers, especially for Africans, will my hon. Friend see whether closed circuit television can be installed in schools as soon as possible?

Mr. Amery: I will look into my hon. Friend's suggestion.

Agricultural Schemes

Miss Vickers: asked the Secretary of State for the Colonies how much money has been spent on improvement schemes for agriculture in Kenya in the financial years 1956–57, 1958–59, and 1959–60.

Mr. Lennox-Boyd: Gross expenditure on agricultural development in Kenya in the financial year 1956–57 was just under £3 million. Estimated expenditure in the years 1958–59 and 1959–60 is £5¼ million and £3½ million.

Miss Vickers: While thanking my right hon. Friend for that reply, may I ask him to press on with these schemes, in view of the fact that Kenya has no mineral resources and that this is the best form of development?

Mr. Lennox-Boyd: I very much agree with my hon. Friend.

Oral Answers to Questions — HONG KONG

Medical Department (Doctors)

Mr. Rankin: asked the Secretary of State for the Colonies if he will urge the Hong Kong Government to remove their ban on the employment of outside doctors in their medical department, in view of the difficulty of filling the large number of existing vacancies from among local Chinese doctors.

Mr. J. Amery: There is no ban on the employment of outside doctors in the Hong Kong medical department. The policy in filling all posts in the public service is to give priority to suitably qualified local candidates, and only if vacancies cannot be filled from this source is the Colonial Office asked to recruit.

Mr. Rankin: Does not the hon. Gentleman realise that the Chinese doctors are not exercising the preference claim which they have been given to employment in the public service because they find private practice so remunerative? Is he aware that as a result there is hesitancy about the employment of Commonwealth and other doctors and that consequently the medical department in Hong Kong is being deprived of the necessary number of doctors to carry on the service efficiently?

Mr. Amery: The latest information I have is that there are 50 vacancies for medical officers, 40 of which it is hoped to fill from the 45 graduates who recently passed their doctors' examination at Hong Kong University.

Mr. Rankin: Are they Chinese?

Oral Answers to Questions — SOUTHERN CAMEROONS

Constitution

Mr. E. L. Mallalieu: asked the Secretary of State for the Colonies if he is now able to make a further statement about the future of the Southern Cameroons; and what alternatives Her Majesty's Government wish to be offered to the people of the Southern Cameroons when they decide on the future constitutional status of their country.

Mr. Lennox-Boyd: No, Sir. Her Majesty's Government continue to hope that the political leaders in the Southern Cameroons will reach agreement on the questions to be put in next year's plebiscite before the matter is dealt with by the United Nations General Assembly this autumn.

Mr. Mallalieu: Would not the right hon. Gentleman agree that, to say the least, it is very important that all practical alternatives should be put before the people of the Southern Cameroons? If there be no agreement among the political parties locally, is it not the duty of the right hon. Gentleman to use his influence with Her Majesty's Government representative at the United Nations General Assembly in a certain direction, and would not the best direction be to say that all practical alternatives should be put to the people?

Mr. Lennox-Boyd: I think it is generally agreed that integration as a separate region with Nigeria would be one choice. The difference is whether the alternative should be joining the French Cameroons or a Trusteeship for a further period before the final decision. The hon. Gentleman knows well enough that the final decision does not rest with Her Majesty's Government alone and it is important that we should, if possible, get agreement in the Southern Cameroons which would strengthen our hand in attempting to secure the best possible result by friendly effort.

Mr. Tilney: Would not my right lion. Friend agree that if the people of the Southern Cameroons are unable to make up their minds and wish to vote again in about five years' time, they should be given that opportunity?

Mr. Lennox-Boyd: That is probably so, but it is very important to get agree-

ment in the Southern Cameroons if that be possible. The Government would be prepared for a period of continuing Trusteeship. There are also disadvantages in this course which are not lost on the leaders in the Southern Cameroons.

Assistance

Mr. E. L. Mallalieu: asked the Secretary of State for the Colonies what discussions have taken place with the Government of the Southern Cameroons about the provision by the United Kingdom of financial aid and of staff to assist in development.

Mr. Lennox-Boyd: No special discussions have been held, but the Southern Cameroons are receiving substantial help under the Colonial Development and Welfare Acts. The public service there is at present staffed by secondment from the Federal public service.

Mr. Mallalieu: Having regard to the indication given by the right hon. Gentleman in the 1957 Constitutional Conference that we should be prepared to give continuing aid if they have opted to remain under our Trusteeship, would not he agree that at the same time it is important to consider the question of staff in the subsequent period?

Mr. Lennox-Boyd: Of course it is, and at the moment, through being able to draw on the Federal public service, the Southern Cameroons are in a far stronger position than if they were on their own.

Oral Answers to Questions — NORTHERN RHODESIA

Employment

Mr. Pargiter: asked the Secretary of State for the Colonies if he will make a statement on the unemployment situation in Northern Rhodesia, giving the number of African and European unemployed, respectively; and what steps are being taken by the Government of Northern Rhodesia to remedy the situation.

Mr. J. Amery: There is no comprehensive system of unemployment registration in Northern Rhodesia. It is thus impossible to state accurately the number of unemployed. Unemployment amongst Europeans has caused concern;


but is not now considered to be particularly serious. There has been an increase in the number of Africans seeking work in urban areas since early 1958. New work permits are not being issued to Africans from outside the Federation. Other measures include increased facilities at Government employment exchanges; and the maintenance of development and capital works programmes at as high a level as possible, particularly in rural areas in the Northern and Western Provinces.

Mr. Pargiter: Is the Minister satisfied that a sufficient effort is being made to obtain diversity of employment in Northern Rhodesia instead of allowing the area to be so completely dependent on the production of copper? Is he satisfied that the Rhodesian Government are making a sufficient effort in that direction?

Mr. Amery: I am sure that they are. The difficulty is to find a market, in Northern Rhodesia or outside, for the new goods produced in the Territory.

Oral Answers to Questions — MAURITIUS

Transfer of Funds (Formosa)

Mr. Brockway: asked the Secretary of State for the Colonies how far permits are now necessary for the transfer of funds from Mauritius to Formosa; and why he authorised the transfer of funds amounting to 20,000 Formosan dollars in September, 1952.

Mr. J. Amery: Specific permits from the Mauritius Exchange Control are necessary for the transfer of funds from residents of the sterling area to nonresidents, including non-residents who are in Formosa, for the same types of transaction as require such permits in the United Kingdom. The answer to the second part of the Question is that no such authority was given.

Mr. Brockway: Is the hon. Gentleman aware that this Question reflects a grave issue not only regarding Mauritius but in international relations? Is he aware that the report of the Seventh National Conference stated that Mr. Ah-Chuen, a nominated member of the Legislative Council, presented this sum for the military purposes of the National Government in Formosa? In view of the

fact that we have recognised the People's Republic, does this mean that we can accept a contribution from a nominated member of the Legislative Council for military purposes against the Government which we have recognised?

Mr. Amery: I have heard such allegations but, so far as I know, they have not been supported. The hon. Member should be careful not to let himself be made a vehicle for Communist propaganda.

Mr. Brockway: In view of the implications contained in the answer of the hon. Gentleman, which are completely unjustified, I give notice that I shall endeavour to raise this matter on the Adjournment.

Oral Answers to Questions — TRINIDAD

Nuclear Base

Mr. Brockway: asked the Secretary of State for the Colonies what plans are proposed for establishing a nuclear base at Chaguaramas in Trinidad.

Mr. Lennox-Boyd: I am not aware of any such plans.

Mr. Brockway: Is the right hon. Gentleman aware that there is great disquiet in Trinidad about the effect of fallout from atomic experiments on the mainland of America and fears regarding the position at Chaguaramas? Can the right hon. Gentleman give a more definite denial than is suggested in his answer?

Mr. Lennox-Boyd: I have answered the Question on the Order Paper. I believe that the hon. Gentleman greatly exaggerates any anxiety. What has happened is that a tracking station has been built which can in no way be regarded as a nuclear base.

Oral Answers to Questions — NYASALAND

Commission of Inquiry

Mr. Brockway: asked the Secretary of State for the Colonies what arrangements for accommodation were made by his officers for counsel who appeared on behalf of the Nyasaland detainees before the Devlin Commission.

Mr. J. Amery: None. Sir, nor did counsel request such assistance.

Mr. Brockway: Is the hon. Gentleman aware that one of the counsel, a barrister from Ghana, was refused accommodation in all the hotels in a town in Southern Rhodesia, when he sought to visit prisons? Is it not the duty of the Government to give aid to counsel engaged on behalf of the Nyasaland detainees?

Mr. Amery: The hon. Member surely knows enough about the position not to put a question to us about Southern Rhodesia.

Mr. Bottomley: While bearing in mind that it is; not the kind of question to put to the Minister, the hon. Gentleman says that there is a partnership in Southern Rhodesia. Why does he not illustrate that by protesting strongly against this discrimination between European and African lawyers?

Detained Persons

Mr. Foot: asked the Secretary of State for the Colonies (1) how many of the persons now detained under the Nyasaland emergency regulations have appealed to the Advisory Committee; how many cases have been adjudicated by the Committee; in how many cases the Committee has recommended release; and how many of such recommendations have been accepted by the Governor;
(2) how many of the persons now detained under the Nyasaland emergency regulations have appealed to the Governor; and how many of such appeals have been allowed, and how many dismissed.

Mr. Lennox-Boyd: Fifty-six detainees have appealed to the Advisory Committee. The Committee has considered 53 of these cases and has recommended conditional release in 18 of them. The Governor has accepted the Committee's recommendations in 10 cases and six are under consideration. The Governor has had appeals from 152 detainees. Nine of these have been allowed, 44 are under consideration.

Mr. Foot: Will the right hon. Gentleman take steps to ensure that at the time when detention orders are served on any of the persons detained under

Nyasaland regulations they shall be fully informed of their right of appeal to the Governor and to the Advisory Committee?

Mr. Lennox-Boyd: Yes. I have been particularly anxious that that should be so. All who are in Southern Rhodesian detention from Northern territories have been told in writing of their right of appeal, and all those in Nyasaland have been told orally through camp commandants. I am quite satisfied that everybody knows.

Mr. Foot: Does the right hon. Gentleman also realise that on the detention form served on detainees there is nothing to indicate what are their rights of appeal? Does he not think that the forms might be altered so that detainees could be fully informed of their rights when they are detained?

Mr. Lennox-Boyd: I am very ready to look at that suggestion.

Oral Answers to Questions — ZANZIBAR

Franchise

Mr. J. Johnson: asked the Secretary of State for the Colonies why the franchise in Zanzibar at present is only open to male Zanzibari subjects over 21 years of age born in the island; and whether he will consider extension of the franchise to residents of Zanzibar who have been on the island five years or more.

Mr. Lennox-Boyd: The franchise in Zanzibar is not confined to persons born in the Protectorate. Naturalised Zanzibar subjects are also eligible for the vote, and one of the conditions for naturalisation is that a person should have resided in Zanzibar for the 12 months immediately preceding the date of application and for four of the seven years immediately preceding this period of 11 months.
With regard to the second part of the Question, therefore, a person who had resided for five consecutive years in Zanzibar would be eligible to become a Zanzibar subject and to receive the vote, provided, of course, he qualified in other respects.

Mr. Johnson: Was it not the case that Abeid Karume, who is likely to be the Chief Minister of Zanzibar when the


island becomes independent, was objected to at the last election because his father had come from Nyasaland more than forty years ago?

Mr. Lennox-Boyd: Someone must also be qualified otherwise, as the hon. Gentleman well knows, to become a Zanzibar subject.

Oral Answers to Questions — NORTHERN RHODESIA AND NYASALAND

Townships (Local Government)

Mr. J. Johnson: asked the Secretary of State for the Colonies what proposals the Protectorate Government of Northern Rhodesia and Nyasaland have in mind for more self-government in the African townships.

Mr. Lennox-Boyd: In Nyasaland there are no townships which can be described as "African townships," with the possible exception of Soche, which is a high density residential area adjoining the Blantyre-Limbe township. Soche is in its early development stage and is, in consequence, under Central Government control through a nominated local authority. The local authority includes two African members. In Northern Rhodesia, African townships are already self-governing. For African housing areas within local authority areas, area boards and African affairs committees, both with African members, are now being established.

Mr. Johnson: Does not the right hon. Gentleman know that these so-called committees are merely advisory councils, usually with a European commissioner sitting as chairman, and that they have no power in a real sense? Would it not be better to give them power since, like Europeans, the Africans need some apprenticeship in local government so as to fit them to take part in national affairs?

Mr. Lennox-Boyd: This is a big step forward which I hope will be successful. I must point out to the hon. Gentleman that both committees and boards can have extra powers delegated to them by the authorities.

Mr. Johnson: But they are not delegated to them.

Oral Answers to Questions — UGANDA

Situation

Mr. Stonehouse: asked the Secretary of State for the Colonies if he will now make a further statement on the situation in Uganda.

Mrs. White: asked the Secretary of State for the Colonies if he will now make a further statement on the present situation in Uganda.

Mr. Lennox-Boyd: Since my hon. Friend's answer on 2nd June, the Governor has reported that a riot took place at Katwe on Thursday, 4th June. I am circulating in the Official Report the text of the Uganda Government's statement on it. Apart from this, there have been no riots or other disturbances in Buganda, although incidents of assault, intimidation and felling of coffee trees by Uganda National Movement supporters have continued in the rural areas of Buganda.

Mr. Stonehouse: Whilst I admit that the situation in Uganda is confused, will the Colonial Secretary bear in mind that the action taken by the authorities in Uganda has contributed to the unrest and that the high-handed action taken in arresting the moderate political leaders is almost as deplorable as the action taken some years ago when the Kabaka was deported? Will the right hon. Gentleman not see that there is a legitimate allowance made for political organisations in Buganda as well as outside, so that we can reach again an opportunity for peaceful political progress?

Mr. Lennox-Boyd: The action taken by the authorities has been at all times designed and limited towards bringing about a restoration of law and order, and I hope that anybody who is in Uganda or goes to Uganda, even if they go from outside, from the United Kingdom, will bear this need in mind.

Mrs. White: In view of the very difficult situation in Uganda at present, will not the right hon. Gentleman agree that it may be rather unrealistic to carry on discussions about the form of the Legislature while neglecting more constructive proposals and the more general discussion of the future of Uganda as a whole?

Mr. Lennox-Boyd: No, Sir. People in the rest of Uganda are very anxious that further progress should be made in Uganda as a whole. It is, however, of first importance to remember that Buganda, though a very important place, is not the whole of Uganda. The need in Buganda is the restoration of law and order and the resumption of Buganda partnership in the Legislative Council. These seem to be essential preliminaries to any progress.

Following is the text:
Seven people including one woman were admitted to Mulago Hospital with gun shot wounds and nine members of the Uganda Police were injured in an affray in Katwe, Kampala, yesterday evening when the police were forced to open fire with Greener guns to disperse a hostile crowd of about 800 to 1,000 who had earlier refused to disperse despite repeated warnings, a baton charge and an attempt to move them with tear gas.
2. According to a police report, an officer on patrol with two men near Katwe Market at about 5.30 p.m. saw a crowd which he estimated at over 500. They were drumming and dancing and in "an excited state".
3. As outdoor gatherings of more than 250 had been declared illegal without a permit, the police officer investigated. One of the men was wearing a tie with the letters U.N.M. on it and many of the people were shouting "freedom". One known U.N.M. leader was seen on the outskirts of the crowd. As it appeared to the police officer that it was not a bona fide social gathering, he tried to persuade the crowd to disperse. The crowd ignored the police whereupon the officer asked a Kabaka's Government chief who was present to assist. Initially the crowd partially dispersed but very shortly afterwards reassembled in greater numbers.
4. A stand-by police platoon of 40 was summoned and on arrival prepared to move the crowd away. The crowd were given a further time in which to disperse. They did not do so whereupon they were formally warned in English, Swahili and Luganda being told "In the name of the Queen I order you to disperse and go to your homes peacefully." The crowd did not obey the order and three men were seen to be preparing piles of stones.
5. Two baton sections totalling 18 police then approached but were stoned so heavily that it was necessary for them to withdraw. Tear gas was then used but the police were still being heavily stoned another crowd were seen to be attacking the police transport in the rear.
6. As this police party of 40 was insufficient to deal with the
mob which had now gathered it withdrew to the police transport under heavy stoning but then came into contact with the other crowd attacking the transport. The stoning increased and it was necessary for the officer in charge of the police to order the police riot guns ("Greener" guns) to be used. As a result the crowd temporarily withdrew.

However further police reinforcements arriving shortly afterwards were immediately and heavily attacked with stones as they were getting out of their transport. The officer in charge of this police party had to order further controlled Greener gun fire.
7. From that time onwards there was a series of sporadic attacks on the police party by stones thrown from behind buildings. Motor traffic on the Katwe by-pass was also stoned. The police continued to deal with these incidents as they occurred until 10.15 p.m. when the area was comparatively quiet.
8. No rifle fire was used at any time.
9. During these incidents a number of police vehicles and private cars were damaged.
10. The Medical Superintendent in charge of Mulago Hospital stated this morning that the condition of the six wounded men in the hospital was satisfactory and they were not seriously hurt. The woman is however more seriously ill.

Oral Answers to Questions — MALTA

Labour Officers (Salaries)

Mr. Awbery: asked the Secretary of State for the Colonies if he is aware that the award of improved salaries to labour grade officers granted by the Malta Arbitration Tribunal in December last has not yet been implemented, that the dispute which led up to this arbitration continued for six years, that the delay is creating uncertainty about legitimate pension rights, and destroying faith in the industrial machinery; and if he will take steps to operate the award immediately.

Mr. Lennox-Boyd: This award was implemented in full on 5th June.

Mr. Awbery: Is not a delay of six years in dealing with an industrial dispute sufficient to break the patience of a Job? Are we not by this delay doing more to destroy the negotiating machinery than by anything else we could do? It provokes men in a position such as this to strike and to destroy the industrial machinery.

Mr. Lennox-Boyd: I am one of the Jobs in this case. The dispute arose during the life of the old Maltese Government. It was not until the Governor took over the administration of Malta that the matter went to arbitration.

Mr. Awbery: But the award was given in December of last year.

Industrial Development

Mr. Awbery: asked the Secretary of State for the Colonies what commercial work has been done in the ship-repairing yards in Malta since the takeover; what steps have been taken to introduce new industries into Malta; and what inquiries have been received from commercial firms requiring sites.

Mr. Lennox-Boyd: I have asked the Governor for this information and, when he replies, I shall circulate the answer in the Official Report.

Oral Answers to Questions — HOME DEPARTMENT

Crimes of Violence

Mr. Hector Hughes: asked the Secretary of State for the Home Department if he is yet in a position to state his plans designed to reduce crimes of violence.

The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): The White Paper on Penal Practice in a Changing Society indicated my plans for combating crime generally, including violent crime.

Mr. Hughes: In order to reduce the number of crimes of violence, what steps is the Home Secretary taking to classify them with a view to diagnosing the causes and treating the disease at its causes?

Mr. Butler: I think there is quite a reasonable answer to that question in that the Cambridge Department of Criminal Science, which we hope to develop into the Institute of Criminology, is already studying crimes of Violence in the Metropolis. A first instalment of the report is expected this summer. It will help us to study crime in this area. We hope to widen the study a little further, which, we hope, will bring us further information.

Mr. Edelman: asked the Secretary of State for the Home Department whether he will set up a departmental committee to inquire into the relationship between crimes of violence and the visual presentation of violence in television and films.

Mr. R. A. Butler: No, Sir. I do not think that examination of this question can usefully be separated from study of

the causes of crime generally; and I believe that the causes of crime can more effectively be studied by research than by ad hoc inquiry by a committee.

Mr. Edelman: Has the Home Secretary noticed the interesting coincidence that the relatively low level of crimes of violence in Scotland occurs in a community where the ratio of television sets to the general population is one in seven, whereas in England, where relatively there are more crimes of adolescent violence, the ratio is one in five? In view of the general bewilderment, as to the cause of crimes of violence, will the Home Secretary consider the possible relevance between the unbridled presentation of violence on television and the actual rise of crimes of violence in England?

Mr. Butler: I would not necessarily accept a description of the relative virtues of Scotland and England on the lines described by the hon. Member, but I realise that this is a very serious matter. I would not accept the absolute view of the ill effects of all television, although there may be some evil effects. This is part of the general research we are undertaking and, if the hon. Member can send me any information, I shall be very glad to receive it.

Mr. Osborne: asked the Secretary of State for the Home Department how many attacks with violence have taken place in the last twelve months involving wage snatching, banks, post offices and all other categories, respectively; what were the figures for each of the previous five years separately; if he is satisfied that the present punishments are adequate to act as a deterrent; what fresh action he proposes to take; and if he will make a statement.

The Joint Under-Secretary of State for the Home Department (Mr. David Renton): I regret that the information for which my hon. Friend asks is not available. The Criminal Statistics are not classified according to the nature of the victim of offences of breaking and robbery. My right hon. Friend is satisfied that the penalties provided by law for offences of this kind are adequate. They include maxima of life imprisonment for robbery with violence and fourteen years for robbery and for breaking offences where a felony has been committed. My right hon. Friend's


proposals for dealing with crime generally were indicated in the White Paper on Penal Practice in a Changing Society, and he will continue to pursue the lines of action described there.

Mr. Osborne: May I ask two questions? When he speaks of life penalties being imposed, can my hon. and learned Friend tell us how many people have actually served a life sentence? Is that not a misnomer? As my right hon. Friend the Home Secretary said in answer to a previous Question that the first report of the Cambridge Department of Criminal Science would be received this summer, will it not be received in time for action to be taken on it before the next General Election?

Mr. Renton: I should like to have notice of both those questions.

Prisoners (Escape)

Mr. Hector Hughes: asked the Secretary of State for the Home Department if he will make a statement about the different obligations, under his regulations, on prisoners in open prisons, who give an undertaking, express or implied, not to attempt escape, and prisoners in other prisons who give no such undertaking, and also about the subsequent treatment and punishment in prison of each type of such prisoner who attempt to escape or who actually escape and are recaptured.

Mr. Renton: All prisoners are well aware that it is an offence under the Prison Rules to escape or attempt to escape from any prison, whether closed or open. No prisoners are required to give an undertaking not to try to escape. The punishment of prisoners who escape or try to escape is at the discretion of the appropriate disciplinary authority, subject to the general provisions of the Prison Rules as to maximum punishments. A prisoner who escapes from an open prison would normally be returned to a closed prison.

Mr. Hughes: Is it not the case that prisoners are put into open prisons because there are greater prospects in their case of their returning to good citizenship than in the case of the others? They are put on their word not

to escape, while others give no undertaking not to escape. Why are those who escape from open prisons treated differently from those who escape from closed prisons?

Mr. Renton: It is broadly true to say that men sent to open prisons are those considered as more promising from a reformative point of view; indeed, the success rate is higher in regard to the men discharged from open prisons than from closed prisons. No undertakings are obtained from prisoners who go to open prisons. In any event, they are committing an offence if they try to escape.

Civil Defence Exercises

Mr. Swingler: asked the Secretary of State for the Home Department if he will take steps to ensure that members of local authorities charged with civil defence responsibilities are granted all facilities to view the conduct of exercises.

The Joint Under-Secretary of State for the Home Department (Miss Patricia Hornsby-Smith): I am sure that local authorities responsible for civil defence exercises are very willing to afford such facilities when they can.

Mr. Swingler: Is the hon. Lady aware—I am sure she is—that I recently drew the attention of the Secretary of State to a case where there appears to be an exclusion of a member of a local authority on grounds of political prejudice? Will the Department make it clear to local authorities that all members of local authorities who have responsibilities should at all times be given access to the exercises under their charge?

Miss Hornsby-Smith: I cannot accept the expression of prejudice raised by the hon. Member. A lot depends on where the exercise is held and whether it is in a confined place. The council nominated observers to go and, quite obviously, we could not interfere with the local authority and whom it nominated for its own functions. If the constituent of the hon. Member still feels he has a complaint to make, it should properly be directed to the local authority.

Juvenile Delinquency

Mr. Hector Hughes: asked the Secretary of State for the Home Department if he will make a statement on the amount of juvenile delinquency during each of the last ten years, indicating the causes and his plans for dealing with it.

Mr. Renton: I will, with permission circulate statistics of juvenile delinquency in the OFFICIAL REPORT. AS for the causes of delinquency and measures for dealing with it, I would refer the hon. and learned Member to the White Paper on "Penal Practice in a Changing Society" (Cmd. 645).

Mr. Hughes: In answer to the first part of the Question, does the hon. and learned Gentleman agree that punishment after the crime is only part of the problem and a great part of the problem is the ascertaining of predisposing causes, such as broken homes, greed, lust and things of that sort? What steps are the Government taking to ascertain those predisposing causes?

Mr. Renton: The causes of crime are greatly variable and some are imponderable. Some of them also are beyond the scope of Government action, but, if the hon. and learned Member studies the White Paper, he will find a section of it devoted to research, of which a great deal is going on. It is all set out in one of the appendices.

Following is the information:

The following table gives index figures, based on 1938 = 100, for the numbers in different age groups, both sexes combined, found guilty of indictable offences per unit of population in the age group since 1949:—


Year
Age Group




Under 14
14 and under 17
17 and under 21


1938
…
100
100
100


1949
…
173
155
122


1950
…
182
160
129


1951
…
194
183
148


1952
…
174
179
151


1953
…
146
152
133


1954
…
125
143
127


1955
…
119
146
136


1956
…
123
161
159


1957
…
137
186
195


1958
…
152
207
248

Criminal Offences (Penalties)

Mr. Anthony Greenwood: asked the Secretary of State for the Home Department when he proposes to review existing penalties for criminal offences.

Mr. R. A. Butler: The penalties under the Larceny Act are included in the review of the law of larceny which I have asked the Committee on the Revision of the Criminal Law to undertake and a review of small statutory fines is in progress. Other penalties are considered as occasion arises, and in considering the legislation to amend the criminal law which comes forward from time to time I have in mind the question whether there should be any alteration in penalties.

Mr. MacDermot: Would the Home Secretary say, particularly in view of the debate yesterday in another place, whether he is proposing to reconsider the penalties for motoring offences, which many people consider too light?

Mr. Butler: I have said that a review of small statutory fines is in progress, and we have in mind a general review of the penalties to which the hon. Member has referred.

Commonwealth Citizens (Crimes)

Mr. Osborne: asked the Secretary of State for the Home Department if he will report on his negotiations with the Commonwealth Governments for the repatriation of all Commonwealth citizens, irrespective of race, colour or creed, who are found guilty in the United Kingdom of criminal activities; and when he proposes to take the necessary action.

Mr. R. A. Butler: I regret that I am not yet in a position to add to the reply which I gave to my hon. Friend on this subject on 26th February.

Mr. Osborne: Can my right hon. Friend say what good reason there can be for not repatriating criminals irrespective of the colour of their skin? Since the overwhelming number of people in the country feel that these people should be repatriated, does not the Home Secretary think something should be done about it quickly?

Mr. Butler: I have already expressed one view in public that there would be a considerable value in having the power of deportation provided it applied to all Commonwealth citizens regardless of colour, but I do not accept that there is universal support for this. As it would be a major change in our national policy, I should expect to get general support before I proceeded further with it.

Mr. Osborne: Although my right hon. Friend says there is not universal support, surely if there is majority support a popular Government could act?

Mr. Butler: I do not anticipate legislation in this Session of Parliament, but, as this Government will undoubtedly have a long future before it in another incarnation, it might be possible to do something then.

Alcoholic Drinks (Sale)

Sir F. Medlicott: asked the Secretary of State for the Home Department how many prosecutions have been instituted during each of the past five years under Sections 136 and 137 of the Licensing Act, 1953, for selling or providing drink to a drunken person on licensed premises; and in how many of such cases convictions took place.

Mr. Renton: As the Answer contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Sir F. Medlicott: Is my hon. and learned Friend aware that at the trial of Ronald Marwood it was stated that on the evening of the murder of Police Constable Summers, Marwood had had twenty drinks served to him, ten in a public house and nine or ten in a registered club? Could we have some assurance that incidents of this kind shall be followed up and the powers available to the authorities under these Sections really exercised so as to prevent tragic events of this kind being caused by men who to some extent must be under the influence of intoxicating drink?

Mr. Renton: It is rather difficult to reply to that fully in answer to the Question on the Order Paper, but my hon. Friend will recollect that there was no evidence at the trial that Marwood

was drunk when he left the public house. It is not an offence to serve drinks even to a drunken person inside a club, where he then went. Indeed, Marwood himself at the trial denied that he was drunk, and the evidence of the police was that twenty minutes after the murder he did not appear to be other than sober.

Mr. Greenwood: When did the right hon. Gentleman's Department last draw the attention of the police forces to their powers under these Sections?

Mr. Renton: I should need notice of that Question.

Following is the information:

OFFENCES AGAINST SECTIONS 136 AND 137 OF THE LICENSING ACT, 1953

Section 136: Permitting drunkenness or riotous conduct on licensed premises, or selling intoxicating liquor to a drunken person.

Year
Number of proceeded against
Number of persons against found guilty


1954
30
24


1955
40
32


1956
25
17


1957
38
34


1958*
32
23


(*provisional)

Section 137: Person on licensed premises procuring intoxicating liquor for a drunken person, or aiding a drunken person to obtain drink on licensed premises.

Year
Number of proceeded against
Number of persons against found guilty


1954
18
9


1955
6
4


1956
2
1


1957
14
13


1958*
7
6


(*provisional)

Prison Service (Pay and Conditions)

Mr. Dodds: asked the Secretary of State for the Home Department if he is aware of the disappointment among prison officers at his failure to implement important recommendations in the Wynn-Parry Report on pay and conditions; and if he will make a statement in view of the unrest in the Prison Service.

Mr. R. A. Butler: The recommendations of the Wynn-Parry Committee relating to scales of pay, which will cost about £475,000 in a full year, were accepted as they stood and given retrospective effect to 1st January, 1958. Since then the Prison Officers' Association have made a claim for a further 3½ per cent, increase in pay. The Prison Commission has been unable to accept the argument that this is justified by the recommendation of the Committee about future movements in pay, and the issue is going to arbitration.
The only important recommendation of the Committee upon which agreement has not been reached is one relating to the remuneration of officers who have passed the promotion examination for principal officer but have not yet been promoted; this question is arbitrable.
Prison officers are loyally carrying out their difficult duties in very trying circumstances. I should be reluctant to believe that failure to reach agreement on one recommendation of the Committee, and on the new pay claim—both issues being arbitrable—has led to general disappointment; nor should it be allowed to obscure the substantial improvement in pay and conditions which has resulted from the Committee's Report.

Mr. Dodds: While thanking the Home Secretary for what he said and while I appreciate his remarks about the prison officers, may I ask whether he can state why he has been unable to receive a deputation of the Prison Officers' Association on these matters when he is usually very courteous in matters of this sort? Is he not aware of the resentment, which seems to be unnecessary, at his refusal to meet them in what they believe to be genuine complaints?

Mr. Butler: Yes, Sir. I am glad to answer that question. The initial negotiations which took
place with the prison officers were conducted by the Prison Commission on the Wynn-Parry recommendations and, as my Answer indicated, on the whole they have been successful. Then there was a request for me to see the prison officers, but, as I understood the position, the issues concerned were arbitrable and one issue, namely the 3½ per cent. increase, was

going to arbitration, and I thought that it was not right for me to receive them at that time when the matter was at that stage. As soon as I can possibly arrange it and these inhibitions do not exist, I should very much like to see them.

Criminal Offences (Costs on Acquittal)

Sir F. Medlicott: asked the Secretary of State for the Home Department if he is aware of the concern felt in many quarters as to the expense which falls on persons who prove themselves innocent of a criminal charge; and if he will move for the setting up of a Select Committee to examine the problem and to make recommendations.

Mr. R. A. Butler: I stated the present position in reply to Questions on 4th June. I am studying the reactions to this statement, as well as other representations on the subject. I do not feel that it will be appropriate or necessary to refer the matter to a Select Committee.

Sir F. Medlicott: If my right hon. Friend should change his mind on a matter which is causing a great deal of concern, will he bear in mind that the same problem is arising in the civil field in regard to matters involving assisted litigants and that we are reaching a situation in which a large number of people who are innocent are punished in the form of a heavy liability for costs?

Mr. Butler: I will make a note of that representation, too.

Mr. E. Fletcher: Does the Home Secretary realise that there is a great stigma attaching to a person who is acquitted on a criminal charge but has to pay his own costs? Will he bear in mind that, although the courts have a discretion in this matter, they rarely exercise it, owing to the doctrine of Lord Hewart and Lord Goddard when Lord Chief Justice? Does he not consider that the time is overdue for the practice of the courts on this subject to be overhauled in the interests of acquitted persons?

Mr. Butler: The hon. Member has rightly referred to Lord Goddard's statement in 1952. This was the view as put forward by the Attorney-General in the Labour Government in 1948 at the time of the Criminal Justice Bill. It was also


put forward in a Circular from the Home Office. I am reviewing the present position against the background of these statements on the representations which I am receiving.

Air-Raid Shelters

Mr. N. Pannell: asked the Secretary of State for the Home Department if he will now give discretion to local authorities to remove from small back yards air-raid shelters erected during the last war, particularly in cases where the retention of such shelters militates against the improvement of the living accommodation.

Miss Hornsby-Smith: My right hon. Friend is always prepared to agree to the removal of shelters if there are compelling reasons, such as the need to facilitate approved building development, but he thinks it is desirable to look at each case on its merits.

Mr. Pannell: Is my hon. Friend aware that Liverpool Corporation, under its by-laws, is ordering the demolition of additions to dwellings such as bathrooms on the ground of inadequate air space while air-raid shelters of equal or greater size may remain? Is he aware that Liverpool Corporation on occasion gives permission for the occupier of a house to demolish the air-raid shelter at his own expense? Does not that vitiate the policy of the Home Department on the retention of these shelters?

Miss Hornsby-Smith: Generally speaking, it is our policy to retain as many last-war shelters as possible. They are removed at public expense only if they are structurally unsound, if it is necessary to remove them on medical grounds or if the space is needed for building development. There are circumstances in which local authorities allow people to take them down at their own expense.

Mrs. Braddock: Is the Joint Undersecretary of State aware that the Liverpool Corporation is very anxious to remove some of the air-raid shelters in the large tenement areas which are spoiling any possibility of providing the open space which is necessary in a large industrial area? Will the hon. Lady look at this question again in order to see whether it is possible to remove some of these very unsightly and unhygienic

shelters in the confines of local government authority tenement buildings.

Miss Hornsby-Smith: If the hon. Lady has any particular ones in mind in her area, I shall be very happy to look at them.

Mr. G. Jeger: Is the hon. Lady aware that this question has been raised on a number of occasions and that many local authorities are of the opinion that these shelters, whilst not structurally unsound, are merely breeding grounds for vermin? Why does the hon. Lady and the Home Office generally persist in the feeling that local authorities do not know their own business and that the man in Whitehall knows best?

Miss Hornsby-Smith: Civil Defence is first the responsibility of the Government and not merely of local authorities. The Government believe that, outside areas of complete devastation, shelters would provide very useful protection if there were an emergency, which we all hope there will not be.

Probation Officers, Becontree

Mr. Parker: asked the Secretary of State for the Home Department whether he is aware of the shortage of male probation officers in the Becontree division; and whether he will take steps forthwith to increase the salaries of ordinary probation officers and the differentials of supervisory officers to meet this national need.

Mr. Renton: My right hon. Friend is aware of this shortage and much regrets it. On the recommendation of the Joint Negotiating Committee for the Probation Service, the salaries of all probation officers were increased last March with effect from 1st October, 1958. and no further increase is contemplated at present.

Mr. Parker: Is my hon. and learned Friend aware that in the Becontree division a great many boys have been sent to approved schools, although the magistrates would much prefer to place them on probation, merely because there are not enough probation officers in the area? This is a very unsatisfactory position, as well as being very expensive.

Mr. Renton: I agree that the position is unsatisfactory, and I am glad to be


able to tell the hon. Gentleman that 56 men will have completed their training as probation officers by the end of this year. The needs of the Becontree division, and the fact that great opportunities for service arise there, will be brought to their attention. One cannot predict whether they will prefer to go to Becontree rather than elsewhere.

Klaus Fuchs

Vice-Admiral Hughes Hallett: asked the Secretary of State for the Home Department when Klaus Fuchs will complete the sentence of imprisonment which he is now serving; and whether he will then be allowed to leave this country.

Lieut.-Colonel Cordeaux: asked the Secretary of State for the Home Department whether Dr. Klaus Fuchs, on release from his present sentence of 14 years' imprisonment, will be permitted to leave the United Kingdom.

Mr. R. A. Butler: Allowing for normal remission, Klaus Fuchs will complete his sentence at the end of June. He was, on his conviction, a naturalised British subject, but he was thereafter deprived of his British Nationality. It will not be for Her Majesty's Government to determine where he should live after his discharge from prison.

Vice-Admiral Hughes Hallett: Can my right hon. Friend assure the House that the knowledge of secret affairs which this man once possessed is unlikely at this stage to be of any further value to potential enemies?

Mr. Butler: Yes. I have looked into this matter. I remind my hon. and gallant Friend that Fuchs has been out of touch with nuclear work for the ten years he has been in prison. Any knowledge he may have had when he went to prison is out of date, in view of the vast developments which have taken place in that field during the last ten years.

Lieut.-Colonel Cordeaux: Whilst fully appreciating that Fuchs' knowledge must be now quite out of date, bearing in mind the fact that at the time of his arrest Fuchs was Deputy Chief Scientific Officer at Harwell and at the time of his trial was described by Sir Hartley Shawcross as "this brilliant scientist", is my right hon. Friend absolutely satis-

fied that his brain will be of no future use to the Russians?

Mr. Butler: I cannot extend my influence as far as that. I can only give the information which I have been able to collect, and I do not think that it is possible to take any other course than that which we are now taking.

Mr. Gordon Walker: What powers would the right hon. Gentleman have to stop this man, or anyone else who is not actually under trial or conviction, leaving the country? Are there any powers to do it?

Mr. Butler: If Fuchs wishes to leave the country he could, in theory, as an alien be refused leave to embark under the Aliens Order. I should like to add that, as a matter of policy, it seems wrong in principle to attempt to use that power to prevent a man whom we have deprived of British nationality leaving the United Kingdom if he so desires.

Mr. H. Morrison: As this man has been deprived of British nationality, is it not within the power of Her Majesty's Government to return him to his country of origin or to deport him in some way or another, because some of us at any rate feel that this was such a wicked case of ungratefulness and disloyalty that the country would be well rid of him?

Mr. Butler: I have investigated the answer to that question also. In law, Fuchs could be deported but no other country can be required to accept a stateless deportee. Therefore, the power of deportation is not effectively available in this case.

Viscount Hinchingbrooke: Is Fuchs' correct legal status that of an alien? Should he wish to remain in this country, would he have to go through the ordinary apparatus which any alien who wishes to remain here has to discharge in order to stay?

Mr. Butler: Yes. As I said in my earlier answer, Fuchs is in theory an alien.

Evacuation Policy

Mr. Beswick: asked the Secretary of State for the Home Department what recent changes have been made in Government policy on evacuation of the


civil population in the event of war; and what approaches he has made to Commonwealth countries with a view to securing their co-operation in this matter.

Mr. R. A. Butler: I cannot yet add to the reply which I gave to the hon. Member for Wolverhampton, North-East (Mr. Baird) on 19th February. There have been no approaches of the nature referred to in the second part of the Question.

Mr. Beswick: How does the Home Secretary reconcile the second part of his Answer at any rate with some remarks which the Prime Minister made in Washington—incidentally, I addressed this Question originally to the Prime Minister—in which he said, referring to the possibility of a nuclear war, that he could not
… ask for the approval of the evacuation of millions, many of them children, to far places of the Commonwealth until I have exhausted every other possibility.
Is the idea of evacuating people to the Commonwealth now the policy of the Government? If so, is it not a matter which the House ought to be allowed to discuss before it is announced by the Prime Minister?

Mr. Butler: The Prime Minister made the observations to which the hon. Gentleman referred, but we have since that date made no approaches to Commonwealth countries with a view to securing their co-operation in this matter. That is exactly how the situation stands.

Road Accidents (Offences)

Mr. Lipton: asked the Secretary of State for the Home Department how many drivers were convicted in 1957 and 1958 for failing to report an accident in which they were involved.

Mr. Renton: In 1957 the number of persons found guilty in Magistrates' Courts in England and Wales on charges of failing to stop after or to report an accident was 7,090. I regret that the figure for 1958 is not yet available.

Mr. Lipton: Has the hon. and learned Gentleman taken note of the fact that the figures of hit-and-run drivers have risen from 6,360 in 1950 to 7,090 in 1957? Is he aware that under the Road Traffic Act hit-and-run drivers cannot

even have their licences endorsed and certainly cannot have them cancelled? Is it not time that the provisions of the Road Traffic Act were examined again to increase the punishment that is imposed for this very despicable kind of offence?

Mr. Renton: That will be a matter for consideration when legislation of that kind comes up in future, but that may be some time ahead.

Mr. Osborne: Will my hon. and learned Friend take encouragement from the evidence that hon. Members opposite are inclined to support increased penalties for crimes?

Mr. Paget: Do these very heavy figures include people who may bump the car in front or behind when coming out of a car park? There are a great many such incidents which are completely trivial.

Mr. Renton: A great many accidents which take place are not serious accidents but nevertheless have to be reported.

Public House, London (Incident)

Mr. M. Stewart: asked the Secretary of State for the Home Department why, on 1st March last, officers of the Metropolitan Police, at the request of the licensee of the Angell Arms, Lough-borough Road, S.W.9, required British subjects of African race to leave the saloon bar of the public house although their conduct had given no cause for complaint.

Mr. Renton: My right hon. Friend is informed that the licensee summoned the police to his assistance because the conduct of the men in question had given cause for complaint.

Mr. Stewart: Does not the hon. and learned Gentleman remember that the letter that he wrote to me in April on this matter contained no complaint whatever as to the conduct of these customers? The letter, indeed, put forward the surprising doctrine that the presence of these customers in the bar was considered to be, of itself, a cause of trouble, and that it was because other customers manifested hostility to these men that they were required to leave.
and it was only later, when I expressed my dissatisfaction with the view expressed in that letter, that this allegation of the unsatisfactory conduct of these customers was made at all?
Is he further aware that one of these customers, who is a constituent of mine, is a substantial and reliable citizen, and has been in this country for a number of years? Will the hon. and learned Gentleman, therefore, be willing to see both myself and my constituent about this matter?

Mr. Renton: I am sorry if my first letter did not make the position as clear as it should have done. I am quite willing to see the hon. Member for Fulham (Mr. M. Stewart), but I think that, in the first place, it would be advisable if I were to see him without his constituent. We can then consider the possibility of my seeing him with his constituent later on. I would point out that the real essence of the case is that the police have to take notice of complaints made by licensees, and to act accordingly to prevent a breach of the peace. They have not always the opportunity of inquiring at the time fully into the justice of the complaint.

Mr. Lipton: On a point of order, Mr. Speaker. As this public house is situated in my constituency, may I ask the hon. and learned Gentleman whether he is aware—'—

Mr. Speaker: Order. I ask the hon. Member to look at the clock. It is after time.

Mr. Lipton: Further to that point of order. In view of the incomplete nature of the hon. and learned Gentlman's reply, I beg to give notice that I hope to raise the matter on the Adjournment at the earliest possible moment.

Oral Answers to Questions — GRIEVANCES OF THE INDIVIDUAL

Dr. D. Johnson: asked the Prime Minister whether, in view of the information concerning cases of individual grievance submitted to him by the hon. Member for Carlisle, he will appoint a Parliamentary Commissioner after the Scandinavian model with powers to investigate and report publicly on all cases in which an individual can claim to have

suffered serious damage to his reputation, his livelihood, or his welfare consequent on administrative or executive action by public authority.

The Prime Minister (Mr. Harold Macmillan): While I have doubts as to whether an arrangement of this kind would be altogether appropriate to our constitutional practice, I will certainly see that the memorandum which my hon. Friend sent me is carefully studied.

Dr. Johnson: Is the Prime Minister aware that at times our Government Departments in their dealings with these cases appear to be subscribing to the philosophy of Dr. Pangloss that the more private misfortunes there are the greater is the general good? Would he not consider the suggestion very seriously indeed with a view to introducing a more coherent philosophy of administration?

The Prime Minister: I repeat that I will study as carefully as I can, and cause to be studied, the suggestions which my hon. Friend has put forward in his memorandum.

Mr. Gaitskell: This is an interesting proposal and I certainly have no objection to it being studied, but does it not involve considerable constitutional changes? I suggest to the Prime Minister that before the Government reach any conclusion, this is the kind of thing which should be studied, possibly by an all-party committee?

The Prime Minister: That is why I ventured to say in my reply that I had doubts whether any arrangement of this kind was altogether appropriate to our own constitutional practice.

Mr. Fletcher-Cooke: If my right hon. Friend feels that this is the wrong remedy, may I ask whether he is not aware that the Report of the Franks Committee called attention to this gap in our arrangements for protecting the liberty of the subject but was unable itself to recommend any way of filling that gap owing to the strictness with which its terms of reference had been drawn? In those circumstances, if this is not the right remedy, has my right hon. Friend considered what is the right remedy for filling this gap?

The Prime Minister: I will look into that point. I think that we ought not


to forget the enormous advance of recent years in sweeping away a great deal of these systems which lead to too much administrative control. Nor should we forget the carrying out of the main recommendation of the Franks Committee.

Mr. Paget: Is it not the traditional function of the Member of Parliament to bring forward the grievances of the individual against the Crown and to secure a remedy before supply is granted?

The Prime Minister: Yes, Sir. It is a function which I have not observed that they are at all reluctant to exercise, either by Question or by letter.

Oral Answers to Questions — FOREIGN SECRETARY (TELEGRAM)

Mr. Rankin: asked the Prime Minister if he will state the cost to public funds of the telegram he sent to the Secretary of State for Foreign Affairs at Geneva on Monday 1st June.

The Prime Minister: Naturally, a large number of telegrams pass between the Foreign Office and the delegation at Geneva, including telegrams from me to my right hon. and learned Friend the Foreign Secretary. Any particular telegram involves no direct cost to public funds, since it is sent over a teleprinter line, the cost of which does not depend on the volume of traffic carried.

Mr. Rankin: Despite that, surely at some stage public funds were involved to some extent in this operation. Apart from that, in view of the fact that the Prime Minister has himself publicised the telegram, what prevents him from publishing the terms of the telegram for the benefit of both sides of the House?

The Prime Minister: I think that the hon. Member missed altogether with his first barrel and was not very successful with his second.

Mr. Shinwell: Since apparently it costs nothing to send a telegram to the Foreign Secretary at Geneva, will the Prime Minister send him another telegram to tell him that I have a Question down for next Wednesday and that I should like him to be here to answer it?

The Prime Minister: I will certainly convey that to him, with all the more pleasure because, as I have said, I can do so without public expense.

BUSINESS OF THE HOUSE

Mr. Gaitskell: May I ask the Leader of the House whether he will state the business for next week?

The Secretary of State for the Home Department and Lord Privy Seal (Mr. R. A. Butler): Yes, Sir. The business for next week will be as follows:
MONDAY, 15TH JUNE—It is hoped to complete the Committee stage of the Finance Bill.
TUESDAY, 16TH JUNE—A debate will take place on an Opposition Motion relating to Hola Detention Camp.
WEDNESDAY, 17TH JUNE—Committee stage of the Cotton Industry Bill.
THURSDAY, 18TH JUNE—Supply [16th Allotted Day]: Committee.
Debate on Local Authority Housing.
FRIDAY, 19TH JUNE—Government business will be taken.
Second Reading of the Chevening Estate Bill and of the Rights of Light Bill [Lords]; and, if there is time, Second Reading of the Metropolitan Magistrates' Courts Bill [Lords], which it is expected to receive from another place today.

Mr. Hale: While bearing in mind the important matter to which I drew his attention last week, will the Lord Privy Seal now turn his mind to an all-party Motion on the Order Paper, in the names of the hon. Member for Graves-end (Mr. Kirk) and my hon. Friend the Member for Gateshead, West (Mr. Randall) and 219 other hon. Members—all of whom signed within two or three hours yesterday—which refers to the World Refugee Year, congratulates the Government on their initiative, and asks for a further consideration of the matter which, quite frankly, we hope will be the preliminary to a full debate?
Will the right hon. Gentleman, in bearing in mind this important matter—which is put forward not in a controversial but in a helpful spirit—also


remember the very special problem of the Algerian refugees which now requires exceedingly urgent action, as reports this week are that 50,000 or 60,000 people at least are living in Tunisia and Morocco in conditions in which they have no roofs over them or protection from the weather—a state of affairs in which our French allies in N.A.T.O. are deliberately preventing help from being sent?
In those circumstances, as this is important, and as we know the sympathy of both Front Benches with any action to solve these problems, will the right hon. Gentleman give the earliest consideration to the possibility of a debate?

[That this House, appreciating the initative taken by Her Majesty's Government in sponsoring World Refugee Year at the United Nations and the additional help being provided for the world refugees, urges upon Her Majesty's Government the necessity of a further lead towards providing concerted international action and aid to solve this grave problem as soon as possible by rehabilitation and permanent re-settlement; and asks Her Majesty's Government to offer the maximum possible economic and other assistance to this end.]

Mr. Butler: Yes, Sir. I realise the importance of the matter to which the hon. Member has drawn attention. Perhaps we might be able to discuss, through the usual channels, whether one of the available days might be used, or whether there might be another opportunity for such a debate.

Mr. C. Pannell: May I draw to the attention of the Leader of the House a Motion which has now been signed by eight members of the Select Committee on Procedure, which asks that the rule made in 1837 about unpublished evidence should be relaxed in fairness to two distinguished gentlemen who contributed to the Select Committee a paper which, owing to the decision of the Select Committee not to publish, can never be published at all? Is the right hon. Gentleman sensitive to the fact that we ought to be rather more grateful Lo members of universities who try to help us, by being a little more magnanimous,

and not clinging too rigidly to an old rule of the House that was framed for a purpose other than this?

[That, notwithstanding the resolution of the House of 21st April, 1837, in the case of memoranda, submitted to the Select Committee on Procedure, but not reported to the House by that Committee, leave be given to the witnesses concerned to publish the memoranda if they think fit.]

Mr. Butler: Yes, Sir. I am grateful to the hon. Member for having given me notice that he would raise this subject. If he will give me some opportunity of examining the implications of accepting this Motion, I will get in touch with him, after taking advice. The very antiquity of the rule causes me to approach the subject with some caution.

Mr. Brockway: May I ask the right hon. Gentleman a question about which I. also, have given him notice? In view of the very sympathetic way in which he has received the all-party deputation on race relations, will he now give facilities for my Race Discrimination Bill, which could be amended in such a way as to be in line with the proposals that were then discussed?

Mr. Butler: I have a copy of the hon. Member's Bill here. At this stage, I could not guarantee to give Government time for it, but if he would care to discuss his Bill with me I could try to find out the implication that he has in mind.

Mr. Roy Jenkins: Is the right hon. Gentleman proposing that the House should, in the near future, debate the discussions with the Scandinavian and other countries for a Free Trade Area of the other Six, or the other Seven, which raises extremely important issues of policy?

Mr. Butler: It is clear that important issues of policy are involved, but I am not satisfied that we have reached a stage in the negotiations when a debate would be useful. If the hon. Member would let me discuss the matter with my right hon. Friends principally concerned, I could then give him an answer.

Mr. Gresham-Cooke: Has my right hon. Friend seen the Motion asking for time for a debate on the Report of the


Select Committee on Procedure? If so, can he give an assurance that we are likely to have that debate in the fairly near future?

[That this House welcomes the recommendations of the Select Committee on Procedure, which whilst limited in effect will contribute towards the more efficient and expeditious conduct of the business of the House, and calls on Her Majesty's Government to provide an early opportunity for this House to debate the Report.]

Mr. Butler: Yes, Sir. I have discussed this in the last week with several hon. Members, including the Chairman of the Committee, and, subject to finding time, we should like to have a debate. The difficulty is that we are just finishing the Finance Bill and matters of that sort, but I know that it is the desire of the House to have a debate and we will try to meet that desire.

Mr. Ernest Davies: Before the Whit-sun Recess, hon. Members on both sides asked whether the House was to have an opportunity to debate the Bowes Report on Inland Waterways, and the Government White Paper setting forth policy on the subject. Can the Leader of the House say whether time will be found between now and the Summer Recess for a debate, so that the House may have an opportunity of expressing its views?

Mr. Butler: I am not quite so hopeful about the waterways as about the Report of the Select Committee on Procedure, but perhaps it might be raised on a day of Supply, if the Opposition so desire. We shall have some difficulty in fitting it in otherwise.

Mr. Stonehouse: Has the Leader of the House given further consideration to a Motion, signed by 120 right hon. and hon. Members on this side, relating to discriminatory legislation in Southern Rhodesia?

[That this House regrets the discriminatory character of certain measures introduced into the Legislature of Southern Rhodesia by the Southern Rhodesian Government, namely, the Unlawful Organisations Bill and the Bill, presented on 17th March, 1959, to amend the Native Affairs Act; and calls upon the Secretary of State for Commonwealth Relations to exercise the powers vested in him in relation to

such measures by Sections 28 and 30 of the Southern Rhodesian Constitution Letters Patent, 1923, to prevent such measures coming into effect until all provisions of such measures which unfairly discriminate against African citizens of Southern Rhodesia are removed.]

That Motion has now been strengthened by an Amendment in the name of my hon. Friend the Member for Swindon (Mr. F. Noel-Baker)—

[After "Act", insert "and the Preventive Detention Bill".]

As those Bills have now been enacted, and the responsibilities of this country now come into play, will the right hon. Gentleman arrange for those responsibilities to be discussed?

Mr. Butler: I could not give any answer without consultation with my right hon. Friend the Secretary of State for the Colonies.

CHURCH SCHOOLS (AID)

The Minister of Education (Mr. Geoffrey Lloyd): With your permission, Mr. Speaker, and that of the House, I should like to make a statement concerning the Church schools.
The Government announced in the White Paper, Command 604, that they proposed in the next five years to press forward with the implementation of the Education Act, 1944, and, in particular, to provide full secondary education for all. They recognised that the Churches might need more help if the voluntary schools were to play their part. The Government have, therefore, been having discussions with the interests concerned, and also with representatives of the Labour and Liberal Parties; and I would now like to inform the House of our conclusions.
The White Paper of 1943 and the Education Act of 1944 provided that the voluntary schools should neither be ignored nor eliminated and that the dual system, while being radically adapted, should continue in existence. Developments in recent years, and the large new programme now projected will, however, confront the Churches with problems and liabilities of a kind and size that could not have been foreseen in 1944.
There have been big shifts of population; building costs are much higher; and, of course, the whole concept of secondary education has been greatly enlarged.
The Government have thought it right to approach these problems in the all-party spirit of the 1944 Act. This, naturally, has meant close consultations with representatives of the Labour and Liberal Parties and we believe that together we have found a solution by applying the principles of the Act of 1944 and of the earlier Act of 1936 to the needs of today. Accordingly, we intend, within the next few days, to introduce a Bill which will

(i) raise the maximum rate of grant on the categories of voluntary school building work eligible as the law now stands from 50 per cent. to 75 per cent.;
(ii) offer a maximum of 75 per cent. grant for new aided secondary schools needed wholly or mainly for the continued education of children from aided primary schools of the same denomination. I would emphasise that the primary schools in question are those existing now, or, of course, replacements.
Proposals on these lines have been accepted by the Church of England and also by the Roman Catholics, although they fall short of what the latter have asked.
Under the Government's proposals grant will not be available for new primary schools, nor for new secondary schools except where they match existing primary schools. I would also emphasise that in considering any proposal for a new denominational secondary school I should use my powers under Section 13 of the 1944 Act to control very carefully the use that is made of the new grants.
I hope that these explanations and this assurance will help to reduce the anxieties which have been expressed to me by the Free Churches.
In brief, the Government's object is to enable the intentions of the Act of 1944 to be fulfilled in the altered circumstances of today and thereby to ensure that the children in aided schools have as good facilities for education as those in county and controlled schools.

Mr. Gaitskell: The problem of voluntary schools has always been a difficult one, but I believe that there will be general agreement that in dealing with it three considerations in particular must always be borne in mind. First,
the need for all-party agreement, because we do not want religion or religious questions to come into our party political battles. Secondly, the need for ensuring that those who are educated in Church schools do not suffer as regards the quality of the education provided in comparison with others. Thirdly, that as far as possible the proposals should be acceptable to all denominations.
I do not think that one can claim that these proposals will satisfy everybody fully. I doubt if any proposals could do so. To us they appear reasonable, our representatives have taken a full part in the discussions, and we willingly accept our share of the responsibility for them. Therefore, I also accept the proposals which the right hon. Gentleman has explained.

Mr. Lloyd: I appreciate what the right hon. Gentleman has said and I should like to acknowledge the help and cooperation that his right hon. and hon. Friends have given.

Mr. Clement Davies: I agree, and I should like to endorse what has already been said by the right hon. Gentleman the Leader of the Opposition.
The principle of the dual system
was accepted by us all in 1944 and it would be wrong if, at this stage, we failed in making the administration and even the intention of that Act incapable of fulfilment. Undoubtedly, there have been very great changes in the way of increased costs, increasing population and, of course, the still greater one in the scope of education and, therefore, it is right that provision should be made to meet that increased cost and these increased difficulties. The paramount question, without a doubt, is the welfare of the child and his future, which depends upon his education.
As the right hon. Gentleman, in his statement, has already recognised, the Free Churches have made, individually and collectively, probably greater sacrifices on behalf of education than any other body. They have been not merely financial sacrifices, but sacrifices of principle, because they have always


taken the view that the expenditure of public money should he subject to public control. That being so, they place great reliance on the assurance which the right hon. Gentleman has given about Section 13. May I ask him whether, if any question arises under that Section, he will receive representations made to him by the Free Churches and consider them as I am sure he will, sympathetically?

Mr. Lloyd: I fully understand and agree with what the right hon. and learned Gentleman has said about the contribution of the Free Churches to our problem. I hold myself under a very special responsibility to be always available to help them in any difficulty that might arise.

Mr. Ashton: Is my right hon. Friend aware that most denominations, at any rate the Church of England, will be very grateful for the statement that he has just made? Furthermore, is he aware that all those who are closely concerned with this vital aspect of education will be glad that the negotiations leading up to his statement have been conducted with the object of obtaining the broadest possible agreement with the least possible controversy, whether political or religious?

Mr. Mellish: Mr. Mellish Is it the intention of the right hon. Gentleman to get this legislation on to the Statute Book before we rise for the Summer Recess? If the answer to that is "Yes", many of us on this side of the House will be delighted.

Mr. Lloyd: With the co-operation of the House, yes.

Mr. J. Griffiths: As one who was associated with these discussions, may I ask the right hon. Gentleman whether he will use his influence to try to remove whatever remains of a very old grievance of the Free Churches, namely, the disability they have sometimes faced in what is called the single-school area? If he gives that assurance, he will have gone a long way towards meeting their apprehensions.

Mr. Lloyd: I always hold myself ready to help in the case of any difficulty that arises in regard to a single-school area, and I know that the authorities of the Church of England are only too ready to co-operate in helping to remove any grievances.

Sir P. Spens: I should like, if I may on behalf of hon. Members on both sides of the House, to congratulate the Minister on having succeeded in getting another agreement on this subject. At one time there appeared to be danger of a very serious split about it in the country. We must be most grateful to all who have worked together to get agreement. While it is concerned with the whole spirit of the 1944 Act, it makes it quite clear that the situation is really back where it was and that the ambit of complete denominational education remains exactly where it is today.

Mr. Lloyd: Yes, it is true that these proposals involve no enlargement of the denominational base because, traditionally, secondary schools will only be eligible for grant if they deal with the continued education of children who are already in primary schools of the denomination concerned.

Mr. C. Pannell: On a point of order, Mr. Speaker. Will you give the House your advice? I understand that the only person who presumes to speak on behalf of the whole House is sometimes the Father of the House and not a former Chief Justice of India.

Mr. Speaker: I have often heard hon. Members say, "I am sure that the whole House will agree with me when I say …" I think that I have heard the hon. Member himself say that.

Mr. Bonham Carter: Will the Minister give an assurance that, as a result of the statement he has made this afternoon, Nonconformist teachers will not suffer in any way in their opportunities of promotion? This is a matter which is worrying them.

Mr. Lloyd: As all those who have studied this problem are aware, the religious tests for teachers are inseparable from the dual system. The enlargement of the system is very marginal in the proposals which I have put forward.

Mr. Philip Bell: May I, on behalf of one of the Christian bodies in this country, namely, the Roman Catholics, who number about 5 million of Her Majesty's loyal subjects, congratulate my right hon. Friend on introducing these proposals? I
am sure that my right hon. Friend does not claim the whole of the credit, hut


shares it with the support which has been given from many quarters of the House and from many bodies.
May I mention that there still is a considerable burden upon the religious community, but that the proposed Measure will undoubtedly alleviate the greater part of the burden?

Mr. G. Thomas: Will the Minister be good enough to tell the House the cost of the proposals?

Mr. Lloyd: About £40 million over the next fifteen to twenty years.

Mr. W. Edwards: Will the Minister tell the House whether the Roman Catholics in this country will pay towards that cost as well as that which they are paying for their children's education at present?

Mr. L. M. Lever: Mr. L. M. Lever rose——

Mr. Speaker: Order. We shall have a Bill before us on this subject and I think that further discussion should be postponed until then.

Orders of the Day — FINANCE BILL

Considered in Committee [Procress, 10th June]

[Sir CHARLES MACANDREW in the Chair]

New Clause.—(REPEAL OF ENTERTAINMENTS DUTY.)

(1) Entertainments duty shall not be chargeable in respect of payments (whenever made) for admission to entertainments given after the thirty-first day of July, nineteen hundred and fifty-nine.
(2) Where entertainments duty has been charged on any payment made before the first day of August, nineteen hundred and fifty-nine, and by virtue of this section no duty should have beeen charged, the person by whom the duty was paid shall be entitled to repayment of the overcharge.
(3) On and after the first day of August, nineteen hundred and fifty-nine, the Entertainments Duty Act, 1958, shall no longer have effect.—[Mrs. White.]

Brought up, and read the First time.

Question again proposed, That the Clause be read a Second time.

3.54 p.m.

The Chairman: Mr. Harold Wilson.

Mr. Ellis Smith (Stoke-on-Trent, South): Sir Charles, I wish to raise several points of order relating to procedure. To enable me clearly to explain these points, it will be necessary to make a few observations but, having studied what is in order and what is out of order, they will be within very narrow limits.
As you know, Sir Charles, Parliament as a whole derives its authority and power from the control of finance. Hence we must be on our guard when any suggestion is made that the Standing Orders or the practice of the House as laid down in Erskine May have not been fully observed. A large number of my hon. Friends, for whom we all have great respect, are now away from this Committee. Last night they were here until after eleven o'clock. Having other engagements to fulfil, they had to rush off to catch their trains, but as a result of what took place last night they are deprived of their right, as Members of the House, to vote against one of the proposed new Clauses.

Mr. Cyril Osborne: They should be here.

Mr. Ellis Smith: They are in various parts of the country. How can they get back? [HON. MEMBERS: "They should be here."] My hon. Friend the Member for Enfield, East (Mr. Ernest Davies) says that they should be here. I agree that we should all be here, but let us not press that too far. If it comes to comparing records, we can safely leave it to the Committee to come to the correct conclusion. Let me make it quite clear that, unlike many others, I associate myself 100 per cent. with my hon. Friends who cannot be here. I am not running away from the issue. They would like to be here, but owing to previous engagements they had to catch their trains to Scotland and other parts of the country last night.

Mr. Osborne: They ought to be here.

Mr. Ellis Smith: I agree that it is the duty of us all to be here. We should be here 100 per cent. To those who keep making interruptions, to which I do not object, I would say that if we were to consider one another's records those who are members of the Institute of Directors would not come out of it very well.
My hon. Friends feel very strongly on
this issue. I intend to quote from the practice of the House later, but for your guidance, Sir Charles, you will see, in HANSARD for yesterday, column 1103, that the following took place. At five minutes past nine we were considering a proposed new Clause dealing with the repeal of Entertainments Duty, the Second Reading of which was moved by my hon. Friend the Member for Flint, East (Mrs. White). Later, we dealt with a proposal by Government supporters.
My first point to you, Sir Charles, is that my hon. Friend the Member for Flint, East, when moving the new Clause, said:
It has been discussed at length fairly recently and I do not wish to weary the Committee by going in very great detail into arguments …"—[OFFICIAL REPORT, 10th June, 1959 Vol. 606, c. 1104.]
I admit that the usage and practices of Parliament are very often matters of interpretation, and that what the practice should be is not laid down very definitely. But I remember the practice

only too well over many years. One would have thought that the Chair—I wish to make it quite clear that I make no reflection on the Chair—might have taken a different course, and what I shall do is to ask the Chair later for an explanation of why this was allowed to take place.
4.0 p.m.
I should have thought that if we are to keep control of finance a Division should have been taken at 11 o'clock last night, seeing that it is admitted, on behalf of those who moved and supported the first new Clause dealing with Entertainments Duty, that the matter had been thrashed out year after year, for many years. Last night we were limited in time. One would have thought that the Chair, interpreting the usage and practice which I shall refer to, should have allowed a Division to my hon. Friends and all those who were here, who would have been in order in using their elementary rights to do their Parliamentary duty in the House, whether some other hon. Members want to do it or not.
The second new Clause dealing with Entertainments Duty dealt with a different issue, and the Chancellor made a statement upon that. Therefore, it was a different debate. I admit that this may raise questions of interpretation and, because of that, I have armed myself with Erskine May's Parliamentary Practice. I wish to refer you, Sir Charles, to page 552, which deals with the safeguarding of Amendments, and says:
Sometimes the chairman selects the amendments to be moved and announces the selection before calling the member in whose name the first amendment which he has decided to select stands.
That is the practice. You were good enough to make an announcement, stating that you had posted a notice in the No Lobby to save time, and make things clear to everybody. There is no one who appreciates that more than I do. That is a step in the right direction, but, at the same time, we want to safeguard ourselves against the difficulties and dangers which can arise from doing that sort of thing. One would have thought that last night the Chair would have called for the second new Clause. Instead of that, the debate took place on the two new Clauses which are referred to in HANSARD.
The debate took place on those two new Clauses and, considering that the first one was disposed of by the Chancellor when he made his statement about a concession, it was surely logical to interpret the Standing Orders and the practice of Parliament in such a way that a Division could have been allowed to the Opposition particularly as we were proposing something different from the Chancellor's concession.
Later, we came to the second new Clause which was not moved. There is a reference to page 553 of Erskine May to the need to safeguard Amendments. Upon that, Sir Charles, I want to suggest that we should learn the lesson for the future. We cannot undo what we did last night. My hon. Friends are away. We are here, and we cannot undo that, but I suggest that, for the future, to safeguard our position, this kind of thing should be avoided.

The Chairman: The hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) has asked, I think, several questions. The first one related to the fact that, last night, at 10.57, I think, there was a Motion, "That the Chairman do report Progress and ask leave to sit again." Of course, the debate on the new Clause No. 3—"Repeal of Entertainments Duty"— is still going on, and we shall go on with it for a fortnight if we like.

Mr. Ellis Smith: May I interpose, Sir Charles? I agree, and I hope that you will bear in mind this point, also. You have been good enough to stress that many of us could have carried the debate on, because we are fundamentally opposed to the Chancellor in what he did.

Mr. Osborne: Why did not the hon. Gentleman and his hon. Friends do so?

Mr. Ellis Smith: I will tell the hon. Gentleman why we did not. We believe in playing the game with some members of the Committee. Some members of the Committee were committed in the way we know. [Interruption.] This is going to distress me. Some of us do not belong to the "Whitehall dinner panic runners", who have constant arrangements made when dinners are taking place all over London. Let us not hear too much about that. It is our duty to be here. We are here, and we were here last night.

The Chairman: Of course, as the hon. Member knows, the debate on this new Clause is exempted business and it could go on for a fortnight, if we liked. Last night, I was not myself in the Chair when it was moved, "That the Chairman do report Progress and ask leave to sit again," but I gather that it was accepted by the Committee. I think, therefore, that that disposes of that point.
As to tedious repetition, nobody wants less of that than I, but one has to give a warning two or three times before one can do much about it. I hope that tedious repetition does not occur. I am all on the hon. Member's side on that.
My next note was, "Provisional". What was that point? I am sorry, but I have forgotten the exact nature of it.
The hon. Member referred to the disposing of one Amendment or new Clause. Of course, when we discuss two together, the first one on the Notice Paper is called and we discuss that, and, if there is a second one, a vote on it cannot be taken at that point, if there is something in between. That is why I have put up a notice in the No Lobby to make matters clear. The new Clause No. 68 will be taken when the time comes, so that the Opposition will be able to speak against it and, if they like, there will be an opportunity for a vote.

Mr. Ellis Smith: Yes, the Standing Orders provide for that. But the Standing Orders provide also that whoever is in the Chair can decide that a new Clause or an Amendment is out of order.

The Chairman: Of course, if a new Clause or an Amendment is out of order, it is never called, anyway. The selection is in the hands of the Chair. Amendments out of order are not called. Obviously, one cannot call an Amendment which is out of order.
As to the saving of Amendments, I think that the hon. Member was thinking of something else. There is no question of saving in this. It is a different matter altogether, when there are two which overlap.
The hon. Gentleman made a point about speaking, I think. Of course, we are in Committee, and Members can speak as often as they like, provided that they are called.

Mr. Harold Wilson: In continuing, this debate, Sir Charles, it is neither my intention nor my hope that we shall debate this new Clause for a fortnight, which was the period you mentioned a few moments ago.
To my hon. Friend the Member for Stoke-on-Trent, South (Mr. Ellis Smith), I will say that I was responsible last night for suggesting to the Chancellor that he should move to report Progress, and I did that for a deliberate reason, having regard to the rights of hon. Members of the Committee and, if I may say so, so far as I ever am biased in these matters, having regard particularly to the rights of my right hon. and hon. Friends.
It was very clear, once the Chancellor had made his statement, just before 11 o'clock, that he proposed to accept in principle the idea of the new Clause standing in the name of the right hon. Member for Blackpool, North (Sir T. Low) and other hon. Members, that many hon. Members—this certainly applied to me—would want to debate that new principle which had just been injected into our debate.
None of my hon. Friends, with the
exception of my hon. Friend the Member for Glasgow, Govan (Mr. Rankin), had really taken time to debate the new Clause spoken to by the hon. Member for Shipley (Mr. Hirst), because none of us thought for a moment that the Chancellor would be likely to accept what we regarded as an unworkable proposal. When he told us that he was accepting it, obviously many of us would have liked to get up and say why we considered it to be unworkable.
In any case, even if the Chancellor had not made his statement, there was a considerable number of hon. Members on both sides of the Committee wishing to speak and make, I am sure, what would have been highly relevant comments about what is proposed in the new Clause.
For that reason, I felt that it would be very inconvenient to hon. Members to be kept here until 12 o'clock or after, missing their trains, so that they could vote. Therefore, I suggested—and the suggestion was accepted by the Committee as a whole—that we should defer further consideration of the new Clause until today. I do not apologise for that.
I do not think that hon. Members have been denied any rights which belong, to them. On the contrary, I think that it has underlined the rights which hon. Members possess, particularly since this was a new proposal which we should be considering in conjunction with the new Clause moved from this Front Bench.
I want to make it plain, also, that, although many of the arguments on this question have been put in past years, this is the first time that a proposal for the total abolition of the Entertainments Duty on cinemas has been moved from the Opposition Front Bench. To that extent it underlines the new and additional importance which many of us attach to this proposal. Furthermore, although it is true that arguments have been put forward by a number of hon. Members in the past, I think that the position has become far more serious in the past year, and it was for that reason that it was necessary to move our new Clause.
Since I played a leading part in the matter, I hope that my hon. Friend will not feel that the Committee's historic control over finance has been weakened in any way.

The Chairman: I have now remembered what the hon. Member for Stoke-on-Trent, South (Mr. Ellis Smith) said. I think that the hon. Gentleman took exception to the new method of putting up the list.

Mr. Ellis Smith: Just the opposite. I am always advocating the introduction of efficiency, and I made it clear—if I did not I should have done so—that I very much appreciate that.

The Chairman: I thought that the hon. Gentleman was making a complaint. I have written down the word "provisional" on it, so I am not absolutely bound by it.

Mr. Wilson: Coming now to the Opposition's new Clause, we very much regret that the Chancellor last night failed to accept it. We believe that the concession he made in indicating acceptance in principle of the Clause which will in due course be moved, and which was referred to last night by the hon. Member for Shipley, is inadequate to deal with the problems of the industry.
I do not intend to repeat all the arguments which were cogently put from both sides of the Committee last night, but the Chancellor should have scrapped this tax entirely in his Budget.
In the Budget debate I used these words:
He ought to have taken the opportunity this year, with the surplus he disposed of yesterday"—
that was Budget day—
to abolish once and for all the Entertainments Duty on cinemas. It yields a sharply falling revenue, and it is now quite clear that the profit is not in the cinemas; the profit is gained now by the operators of commercial television".—[OFFICIAL REPORT, 8th April, 1959; Vol. 603, c. 220.]
That was the general attitude which we put forward in the Budget debate. I think that it is an answer to the claim which the Chancellor made last night that he did not have enough money to enable him to accept the Amendment.
Entertainments Duty was a war-time measure, introduced in 1916 on a temporary basis, like every other tax on the Statute Book. The principle of it was that a great deal of money is spent on the cinemas and it was at that time, and for many years afterwards, quite profitable. But sport, such as Association football, Rugby football and cricket, and the living theatre have been rightly taken out of the Entertainments Duty field by decisions of this Parliament. As we all know, the crowds have now deserted the cinema screens for the television screens.
In suggesting that the tax should follow the public, I do not mean that the public should pay the tax. What I feel, and what I am sure hon. Members in many parts of the Committee feel, is that the television operators are now obtaining a large and uncovenanted monopoly profit which enables them far more easily than cinema proprietors to meet any claim that the Government might reasonably put upon them. They are certainly better off than the cinema proprietors and film producers.
4.15 p.m.
The Chancellor last night ignored the real depression in this industry and he ignored it in his Budget. In his Budget he concentrated his generosity on the brewers. The case here is very much stronger. The brewers are very much

more prosperous than the cinema proprietors. Since the Committee passed the Clause relating to beer duty, we have seen how profitable breweries can be and how much untapped, if that is the right word to use, financial reserve there is in the brewing industry which needs the genius of a Clore to bring into the light of day. Yet the Chancellor felt that the brewers needed help and that the cinema industry did not need help.
I am sure that if it were a question of the Chancellor wanting to increase the consumption of beer and to increase the revenue, he could have done so by asking the brewers to reduce the price of beer. If the breweries are so profitable that the shares should rise so much following this take-over bid, clearly the Chancellor could have persuaded the brewers to reduce the price of beer without reducing the tax, and the revenue would have been fortified all the more. However, it would be out of order to pursue further this question of the beer duty. I am trying to demolish, without too much difficulty, the argument of the Chancellor that he has not the money to accept this eminently sensible and reasonable new Clause.
I do not intend to repeat all the very eloquent and moving figures given from both sides of the Committee about the position of different cinemas. I have received many letters from all parts of the country since the Budget—I received a number before the Budget—which tell broadly a similar story to that told by hon. Members last night. Although I could detain the Committee for some considerable time by reading extracts from those letters, I do not propose to do so.
When there is a fall of nearly 20 per cent. in cinema admissions in 1958 compared with 1957, when there is a further 20 per cent. reduction in cinema admissions in the first quarter of this year compared with the already depressed first quarter of 1958, when there is a fall of £10 million in the box office takings in a single year, when we hear the calculations of my hon. Friend the Member for Flint, East (Mrs. White)—and, incidentally, I do not think that any Treasury Minister has attempted to question her calculation that 800 cinemas have been closed in the last five years—I think that the case for our new Clause is fully made out.
So far, most reference has been made to the cinema proprietors. I am sure that if my hon. Friend the Member for Nottingham, West (Sir T. O'Brien) were here he would have underlined the position of the workers both on the exhibition side and in the industry as a whole. My hon. Friend the Member for Flint, East specifically referred last night to the film producers and to exports. It was encouraging to hear the tributes from both sides to what the film industry is now doing in the export field. I take some satisfaction from that, because many of the films that have made such a remarkable showing in export markets were financed with Government money as a result of the decision which we took in 1948 to establish the National Film Finance Corporation.
Little was said last night about the position of the film producers. The Minister will know the figures. In 1957–58, I think that 134 feature films were produced, in 1958–59, 121, and in the present year the programme is for 107, which is a very serious fall. Unemployment in the studios is certainly increasing.
The question of embarking on new film production is very much a question of confidence. There is a two years' gestation period for the making of a film. It is comparable to that of the elephant. When the Chancellor destroys confidence, or fails to restore confidence, as he could have done last night—[Interruption.] I am sorry if I have got the two Treasury Ministers excited by my reference to the period of gestation.

The Economic Secretary to the Treasury (Mr. F. J. Erroll): I merely wondered whether the right hon. Gentleman was accurate in his relative periods.

Mr. Wilson: I thought I was right. If not, I shall be happy to withdraw. I have not checked it. In any case, I should be out of order if I went into that much further.
At least, there is no doubt that the period from the inception of a new film to its production generally averages about two years. Therefore, the Chancellor's failure to give a much-needed confidence to the industry last night will have a serious effect on film production two years from now.
For one thing, we know that film production is very much a question of

finance. Finance will be tighter in view of the fact that the Entertainments Duty is not being abolished. It is not only a question of private finance, end money and all the other delightful phrases which are often used in the film industry. The National Film Finance Corporation is at present being very tight on the question of financing film production. One understands the Corporation's position in view of its statutory responsibilities. It would feel more confident in financing more film production had the Chancellor agreed to the removal of this duty last night.
I also remind the Government Front Bench that last year, when the Chancellor removed £14 million of Entertainments Duty, the genuine producers of British films—I define British films in a narrower than quota sense; I exclude American producers producing in this country with blocked sterling under the 1948 Agreement—got only £1·1 million out of the £14 million tax concession made by the Chancellor. If the same proportions rule now, it will be clear that their share of the £2½ million concession announced by the Chancellor last night will be even more infinitesimal.
I do not intend to refer to the scheme which the Chancellor accepted in principle last night. It was well and truly debunked in all its anomalies by my hon. Friend the Member for Govan, in the course of his knowledgeable speech. If my hon. Friend the Member for Walthamstow, West (Mr. Redhead) is successful in catching your eye, Sir Charles, as, I hope, he will be, he will develop some of the arguments that we would want to deploy against the scheme proposed by the hon. Member for Shipley. My hon. Friend will be deploying the argument with expert knowledge to which most of us cannot make claim. The real issue is that £2 million or so will not solve the problem, but will, in fact, create more anomalies. Every time that we have attempted to have a shielding of this kind, more anomalies have been created. The Chancellor should have made a clean sweep of the Entertainments Duty.
I conclude by referring to the fact that the Chancellor gave only two reasons for not doing so. The first was based on his claim of cancellarian poverty, that he had given so much away on other things that he did not have the money


to do anything more. I have dealt with that and said that he should have put the cinema claim higher than that of the brewers. Last night, however, the Chancellor gave a second reason, which some of us thought was rather sinister and new. Certainly, it was very ominous. If there were no other justification for continuing this debate today, the fact that the Chancellor has thrown a new idea into the pool concerning Entertainments Duty is a thorough justification for going on with this debate and examining it.
The Chancellor has decided—as I have said, this is new—that some sort of tax on the cinemas should be permanent, a kind of offshoot of the Purchase Tax or, perhaps, a concession to the sales tax idea which has been put forward on various occasions. Let me remind the Committee of the words used by the Chancellor last night. Referring to the proposal that our new Clause should be accepted, he said:
Were it done, it would relieve entirely from indirect taxation about £80 million worth of consumer expenditure of a kind which is neither on basic essentials nor deserving of special encouragement on social grounds and which, in the long run, I should think would be able to support a moderate rate of duty along with other analogous expenditure. Therefore, I do not feel that on the present evidence it would be justifiable to relieve this form of entertainment entirely from taxation. The rate of taxation that it will bear will be a good deal lower, far lower, than is the case with many other forms of consumer expenditure on entertainment in other forms."—[OFFICIAL REPORT, 10th June, 1959; Vol. 606; c. 1132.]
I think that I am right in claiming that that is a new argument which so far has not been put forward by the Treasury Bench in any debate on Entertainments Duty. We have always considered that Entertainments Duty was a regrettable necessity at a time when the entertainments industry was more profitable. I have given my reasons for suggesting that the duty should have been switched as public attention has been switched from the cinema screens to the television screen. I would not have been at all surprised if the Chancellor had said, "I am sorry, I cannot afford it this year, because I have done so much, but we will look at it again". I have given my reasons why that would have been a poor argument, but it would not have been a surprising one.
What is surprising is that the Chancellor has now, for the first time, said, in effect, that the taxation of cinemas must be a permanent feature in our tax structure. Obviously, he regards Purchase Tax as a permanent feature in our tax structure and he appears to regard this as analogous to Purchase Tax. It looks, therefore, as though the Government are still flirting with the idea of a general sales tax and one now, apparently, which is to be extended to services and entertainments as well as to physical commodities. On that basis, the Government will be proposing to extend it to laundries, dry cleaning and a hundred other services if they have this general sales tax.
The Chancellor last night was using carefully considered words, which either he had drafted in the cool of his yacht, or wherever he drafts his speeches, or which had been drafted for him and which he had considered and approved. It is, therefore, ominous that he should use those arguments in rejecting the new Clause. The Chancellor has shown that he cannot abide the thought of any substantial slice of expenditure going on which does not bear tax. The fact that £80 million is spent on cinema entertainment suggests to him that here is a good place for the Treasury to maintain its claws.
We feel, therefore, that no satisfactory arguments have been put forward for the rejection of our new Clause. By accepting in principle another Clause, which we believe to be on the wrong lines, the Chancellor has entirely failed to meet the needs of the industry. More particularly, he has injected a new note into our debates on Entertainments Duty in suggesting that the Government at least believe that in some form or other, and at some rate or other, the taxation of cinema admissions should be a permanent feature of our tax system.

4.30 p.m.

Mr. Eric Johnson: I would like to refer to what the right hon. Member for Huyton (Mr. H. Wilson) has said about the speech made last night by my right hon. Friend the Chancellor of the Exchequer. I confess that I, too, was disappointed at what my right hon. Friend said in that speech. He seemed to be making the point that there was every justification


for keeping up a tax on the cinema industry and that the industry had failed to prove any need for a remission. It seems to me that we have got the idea of taxation in this case somewhat the wrong way round. My right hon. Friend should come and explain to the Committee for what reasons he proposes to keep a tax on the cinema, alone of all entertainments, at a time when the industry is losing money.
It was most regrettable that in the Budget which brought so many very welcome remissions in taxation, including one which helped the television industry, by abolishing Purchase Tax on television tubes, my right hon. Friend has not seen his way to remove the tax on the cinema industry which brings in a relatively small amount of revenue which is rapidly decreasing as cinemas close. No one would challenge the value of the contribution which the cinema industry makes as a source of entertainment at home or in earning foreign exchange by sending films abroad. I agree, also, that perhaps as much as, if not more than, any other, this industry depends on a strong home market if it is to be able to send its products abroad.
It is well known that admissions and takings have been falling for some years and I understand that this year film production has also shown a sign of falling off. I do not want to worry the Committee by repeating statistics and arguments which have been put forward already on many occasions, but I should like to draw attention to the position in my own constituency of Blackley, which is situated about four miles from the centre of Manchester and cannot be said to be over-endowed with cinemas.
We had five cinemas, but one has been forced to close. The remaining four have a seating capacity ranging between 900 and 1,300 seats. All of them have shown a drop in the number of admissions by about 25 per cent. in the year ending last March compared with the previous year. One of them, of which I have the greatest details, shows a drop in admissions of no less than 55½ per cent. between 1954 and 1958 and I expect that the others would show much the same if I had the full figures. Takings tell the same story. The smallest of the four surviving cinemas is

making a loss, but it still had to pay £292 last year in taxation, which is a most unjust state of affairs.

Mr. Gerald Nabarro: Is my hon. Friend advancing the argument that the profitability of an industry should be the arbiter as to whether it is taxed at a particular rate or given unilateral relief? On that thesis the Government should inject ten times the sum of money suggested into the cotton industry to keep unprofitable businesses in being, if my hon. Friend carries his argument to its logical conclusion.

Mr. Johnson: I am not advocating giving any help to the cinema industry, but advocating the end of unfair discrimination against an industry which in some cases is losing money. I do not know what my hon. Friend does, but if I had an income of minus something I would not expect to be taxed on it. That seems to be the position in the case of this cinema. The other four are making a small profit, not by showing films but on the refreshments they sell and the advertisements they show.
Cinemas of this type are also finding it increasingly difficult to keep up the proper standard of decoration, furnishing, comfort and equipment which they would like to keep up. The result is that as they deteriorate there will be a continuing and increasing falling off in the number of people who go there.

Mr. Douglas Glover: I agree with my hon. Friend in his comment on what my hon. Friend the Member for Kidderminster (Mr. Nabarro) said, but he is a little unfair to the Chancellor of the Exchequer, because the concessions to which he agreed last night will remove nearly all the tax that this sort of cinema pays. Cinemas will have to have been paying at least £1,000 a year now before they are taxed at all.

Mr. Johnson: I wish that my hon. Friend had been able to possess his soul in patience for about two seconds more, because then he would have heard me say that I welcome very much the concession which the Chancellor made in respect of the new Clause in the name of my right hon. Friend the Member for Blackpool, North (Sir T. Low), which we discused last night. That Clause will be of immense help to the cinemas in my constituency and will mean that in


future none of them will have to pay any taxation. I believe that the concession will keep those cinemas going until there is a revival in cinema-going. I disagree with what my hon. Friend said about that last night. I think that when the novelty of television wears off there will be a revival in cinema-going, because the cinema is an infinitely better form of entertainment than television.

Mr. Nabarro: I do not think so.

Mr. Johnson: The concession will at least keep the cinemas going until that happens, as I believe it will. I am grateful for a concession which will help all the cinemas in my constituency. But I do not believe that it goes far enough, for the reasons which I put forward earlier. Although I am grateful to my right hon. Friend, I think that it is a pity that he allowed himself to become a party to what seemed to me a typical piece of Treasury meanness, by refusing, as I understood him to say, to make this relief retrospective to the date of the Budget. It is a greater pity that my right hon. Friend did not see his way to abolish altogether a tax which is unfair and discriminatory against one alone of the entertainment industries. I would find it very hard to oppose the new Clause in the name of the right hon. Member for Huyton, which was expounded last night by the hon. Member for Flint, East (Mrs. White).

Mr. John Diamond: As can be well imagined, it is a very great pleasure for me, as the former Member for Blackley, to follow in the debate and congratulate the hon. Member for Manchester, Blackley (Mr. E. Johnson) on what he has said. I endorse every word. I feel a good deal better now about the defeat that I suffered at his hands in 1951. It was well-deserved for the pleasure of hearing him say things with which I entirely agree about the cinema industry.
During the six years I was out of the House of Commons, as a result of the hon. Member's efforts, I devoted myself in a very direct capacity to the cinema industry. One cannot help being somewhat aware of the circumstances of an industry one has worked at day and night—as people do who are engaged in that industry—for a period of six years. I must make clear, however, that

my interest in the industry ceased before I returned to the House.
I entirely agree that the cinema industry should not have to come here and ask for this tax to be withdrawn. The Chancellor ought to stand at the Dispatch Box to justify this tax at all. There is no justification any longer for a tax which is levied on one industry alone and which it has been shown now, for the third year, as a total industry will make a loss even after the reductions which the Chancellor now proposes. I said this last year, and it is encouraging to hear other people say precisely the same thing this year. But what is most discouraging is to hear the Chancellor going backwards.
The most serious thing is that the right hon. Gentleman has really taken a marked step backwards, because the industry cannot afford any tax. There is no justification for a tax which is not only discriminatory, but which falls on losses. Although there was implicit in everything the Chancellor said up to this year a recognition of the difficulties of the industry and of the fact that when circumstances permitted he would withdraw the tax completely, this year he has changed round completely. He made perfectly clear in our earlier debates that he is turning in favour of a kind of general Purchase Tax or modest sales tax which will cover all forms of small expenditure and he regards going to the cinema, quite properly, as a form of consumer expenditure.
I endorse heartily everything said by my right hon. Friend. It is vital that this matter should be cleared up. The difficulty of the industry up to now has been that it has not been able to make headway against television or against the changing pattern of entertainment. But, at all events, it has had the hope that if it kept pressing this claim it would at least have a chance to see daylight it would have a chance of standing on its own feet and not being penalised. It would have a chance of making its way in the world as, under a private enterprise, competitive system, it is entitled to feel it can do under a Conservative Government.
Now, however, in view of what the Chancellor said, it has a cloud hanging over its head and is in a difficult position,


both as a result of what the right non. Gentleman said in the Budget speech, which the whole trade has taken up, and in particular because of what he said last night. I hope, therefore, that nobody less than the Chancellor will make it absolutely clear either that he meant what he said—because, with the greatest possible deference, the right hon. Gentleman was not quite clear after he had said it whether he had said it or not, and there was an interruption between the two Front Benches—or that we have misunderstood him and that the industry can have some hope that even under a Conservative Government it will be allowed to row its own boat, to make its own way, and not be so penalised.
The arguments have been repeated so often that one does not want to cover them again, but it happens that I have received one letter from a lady, not a constituent, which applies so pointedly to this matter that, if I may trouble the Committee, I will read it. I intervened in the Budget debate to put forward all these arguments and to suggest that there was no longer any justification for the Chancellor saying that he could not afford this concession, because if only he raised his horizons he would see much better and wider and more plentifully full coffers into which he could put his hand right up to the elbow as far as I am concerned, and recoup the modest £9 million of revenue he would lose from this source.
My intervention was picked up in the Daily Express, which was good enough to publish something of what I said under a section called "Opinion". In fact, it went so far—I do not regard this as entirely libellous—as to say that these remarks were commonsensical. The letter I received stated:
I read in 'Opinion', Daily Express yesterday, your remarks.… I am an old age pensioner, aged 75, and the cinemas are the only form of entertainment who give us any concession. We are allowed in before 3 p.m. for 7d. or 9d. and can sit anywhere we like. We have to pay the same as the rich for our wireless licence, and T.V. is quite beyond our means. If cinemas have to close it means bus fares to get to one further away"—
This letter comes from a Londoner—
and pennies have to be counted when you have only £2 10s. Please go on fighting for the removal of the tax so that we may not be deprived of our one weekly pleasure.

That is a very relevant letter. Anybody in the industry knows that it is common practice almost throughout it to give a special concession to old-age pensioners. Perhaps what everybody here has not looked at is that it is cheaper for the old-age pensioner to go to the cinema in the afternoon and pay that amount to keep warm than to try to do so at home. That facility can only be given if the cinemas are able to make ends meet and they cannot make ends meet at the moment, even with the £2½ million reduction which the Chancellor proposed last night.
4.45 p.m.
I am delighted that my right hon. Friend the Member for Huyton (Mr. H. Wilson) raised the question of the employees, because it is not only for the employers that we are arguing this matter. In any industry where receipts are so low, and expenses are so high that profits are negligible or nonexistent, it has always been the case that the employee has to suffer in his conditions of employment and rates of pay. If an industry cannot afford reasonable rates of pay, of course they become unreasonably low. That is without question the situation on the exhibiting side of the cinema industry. That can be tested by having regard to the turn-over of employees in any cinema.
The trade union rates which can be
offered are so low, and the conditions of employment are such, that it is not surprising that, for instance, a young woman who is engaged in the morning fails to arrive in the afternoon, even before employment has started. The turn-over in all categories is enormous and makes life an absolute misery for anybody who has the unfortunate responsibility of trying to run a number of cinemas.
This is inevitably the case when profits are so low. I want the Chancellor to realise that he is not taking money out of the pockets of the patrons. That is a form of words which is utterly deceiving. He is not taxing a form of consumer expenditure. The patron's entrance fee would go to the cinema whether there was tax on it or not. The whole amount will go whether the tax is reduced or not. What the Chancellor is taxing is the ability of the cinema proprietor to pay decent wages to his


employees. The right hon. Gentleman is taking money which would otherwise be in the pockets of these employees, because with the present level of takings and the present level of activity in the cinemas there is nothing left with which to pay decent wages.
The cinemas are struggling to keep on, hoping, as they did justifiably until this year, that there would be daylight either when the Chancellor was able to take a new look at television or, because of increasing revenue from other sources, he could forgo the tax on the cinemas.
I say, therefore, that the situation is most serious. It has been so for some time. The figures put before this Committee and the Chancellor, circulated by the trade, estimating the returns in the following year, have always been wrong. They have always been on the low side. They have always been optimistic as to profits. The figures have always turned out worse than they were estimated. I argued this point last year and I repeat it. Does the Chancellor accept the figures? If so, what is the justification for continuing to levy a tax on this one industry alone, a tax which falls on the particular cinema, the burden of which has to be shared by the proprietor and, more particularly, by the workers who are engaged in the industry?
There is no sensible reason in terms of the tax structure, because no profits are being made, only losses. There is no reason in terms of revenue because revenue can be sought elsewhere. There is every reason to help this industry by enabling it to stand on its own feet and to direct its attention to its own affairs, instead of continually having to direct the whole of its attention to fighting the Chancellor and the Revenue to get the tax removed. Let the Chancellor take off the tax and let the industry use all its endeavours to put its own house in order and have some co-ordination there.
We all recognise that the fact of removing the tax will not make every cinema proprietor a Surtax payer. What I stress is that so long as the main endeavour of the cinema proprietor is to get the Entertainments Duty removed, he will have a most profound psychological reason for devoting his attention to that, instead of looking at the affairs of the industry as a whole.
For all those reasons, and particularly because the Chancellor's suggestion is unworkable and unsatisfactory, I echo the hope already expressed that we shall register our opinion most strongly.

Mr. John Howard: Like the hon. Member for Gloucester (Mr. Diamond), I had some little experience in the cinema industry before I came to the House of Commons. I hurry on to say that I no longer have any connection with the industry, although I still follow the same profession as the hon. Member for Gloucester. I do not take his view of the new Clause moved by my hon. Friend the Member for Shipley (Mr. Hirst) and which the Chancellor last night indicated he was prepared to accept in principle, although he had to do some tidying up on Report.
The proposals in that Clause have a number of merits. The Clause would retain the present organisation and the arrangements for a check by the Customs and Excise authorities, which are important in an industry which is handling cash and paying a film levy and in which the exhibitor is paying film hire to the renter. Some check is needed on the takings of the cinema. For that practical reason, there is some merit in retaining the present organisation. I am not saying that it is worth £9 million to the industry, but a trade paper recently reported the problems which face the industry in connection with a check of box office takings and referred to the activities of the Kinematograph Renters Society which undertakes the audit of the exhibiting side of the industry.

Mr. Diamond: Will the hon. Gentleman be good enough to explain, in view of this K.R.S. audit, what advantage to the industry there is in paying £6½ million to the Chancellor for this additional audit? Would it not be done equally well by the hon. Gentleman and myself, who could do it much cheaper?

Mr. Howard: I am sure that I should be delighted to work with the hon. Gentleman and to do it for a cut fee, but he will agree that the Customs and Excise audit is much more extensive. I do not wish to pursue the point too far, but it is one of the advantages of retaining the present structure.
Most of us have received representations from local cinemas. I certainly have and I believe that these proposals will go some way towards meeting the trading difficulties of the smaller cinemas. If he follows the proposals of the new Clause of my hon. Friend the Member for Shipley, the Chancellor will provide a rebate of £20 a week in the entertainments tax paid by a smaller cinema. It has been pointed out by the hon. Lady the Member for Flint, East (Mrs. White) that a considerable proportion of that £20 a week might well go in additional film hire, so that the exhibitor would receive a subsidy not of £20 a week, but of a sum rather less than that.
An exhibitor recently wrote to me to say that he put film hire as high as 50 per cent., so that the advantage to the small cinema would be limited to £10 a week if film hire were maintained at that rate. That exhibitor might have placed the cost of film hire on the high side, but that figure serves to illustrate the point.
For once in a way it is up to the trade to decide how this £20 is to be apportioned. Clearly, £10 will go to the exhibitor. Will the renter take the remaining £10, passing some to the producer, or will that section of the trade say that it relies on the small cinema for its livelihood and that it will be generous and allow the small cinema to retain the whole benefit of that £20 a week, disregarding the entertainments tax in computing film hire?
One thing is certain and that is that the relief in duty will not be passed on to the patron at the box office. It will clearly all be taken up by the trade. I rose only to make the narrow point that I hope that, having pressed Members of Parliament to rescue the small cinema and since there are now indications that some relief is at hand, the trade will itself consider being generous to the small cinema and will not wish to see it submerged through film hire taking nearly half of the relief which the Chancellor is likely to offer.

Mr. Stephen Swingler: After what happened last night, there is a strong temptation to continue this debate for a fortnight, but you have no need to become alarmed,

Mr. Thomas. We are in a rather curious position. As hon. Members who have taken a consistent interest in the film industry will know, some months ago there was an all-party meeting in the House which was attended by representatives of the industry and by some of the outstanding artists in the trade. The meeting called for the abolition of Entertainments Duty.
After that meeting, in which there seemed to be considerable interest and substantial support for the abolition of what had become a cinema tax, some of my hon. Friends and I decided to promote a back bench Motion calling for the abolition of Entertainments Duty. We thought that we would get some support from hon. Members opposite. However, we were unfortunate in that respect and interest in the subject seemed to have declined.
On Budget day, the Chancellor made no mention of the position of the cinema trade and the film industry. Nor did he refer to Entertainments Duty. Later on we discovered that an Amendment had been put down by hon. Gentlemen opposite and last night we discovered that, having made no mention of it on Budget day, the Chancellor had suddenly become prepared to concede £2 million or more to the trade. That would be an interesting subject for a fortnight's investigation.
Whatever their technical merits or demerits, the Chancellor's proposals are totally inadequate and irrelevant to the whole problem. Those who attended these debates twelve months ago know that we discussed tax relief very thoroughly then. I can remember the sunshine and moonshine propaganda of hon. Members opposite about how we had reached the end of the fall in admissions and the end of the period of closures, and so on. However, those hopes have been proved to be unfounded and now the trade and industry are concerned only with the complete abolition of the tax.
I agree with those who have argued that the tax is discriminatory. We are now at the stage when the Chancellor has to justify singling out the entertainment of the cinema as compared with all other forms of entertainment. It is not now a case of why we should abolish the tax. It is now a matter of why the


tax should not be abolished and why cinemas should be chosen for a special form of taxation when that taxation has been ended on all kinds of sport. What is the difference between admission to a cricket ground and admission to the Odeon cinema in this respect? No justification has been made out for retaining this special kind of discrimination for this form of entertainment.
5.0 p.m.
The second point is that nobody disputes the tremendous decline in the industry and trade. To put it harshly, the Treasury ought not to be an accessary after the fact to the murder of hundreds of cinemas. Many cinemas have closed down in the last few years, and it may be that many more will have to close because of falling attendances. Ought we deliberately to accelerate this decline and increase the difficulties for those in the industry and trade?
What my right hon. Friend said in opening the debate has special significance because the inference, from the Chancellor's view of the tax, is that there is to be some permanence in taxing the cinemas and discriminating against them compared with other forms of exhibition and entertainment. We should like a definite reply from the Chancellor about this, because it appears to be a flagrant case of injustice.
We know that some people in the cinema trade and film industry do not need the money. Some people are making considerable profits and there are other forms of taxation to deal with profits and high incomes. The question is whether it is any longer just and desirable to tax the receipts at the box office of a form of entertainment that is in a very serious decline.
My last point is that the abolition of Entertainments Duty is the only solution. We shall not get the sorting out in this industry that is necessary until that has been done. So long as any form of taxation remains on the cinemas, it is natural that those in the trade will continue to discuss the relation between the tax imposed on them and their economic difficulties as if the Entertainments Duty were a major contributory factor to their difficulties. Only when we have abolished taxation on the cinemas will we get a state of affairs in the trade where there

will be a more realistic appreciation of the reorganisation of the industry that is required, and particularly in relation between the exhibition side and the production side.
If we pass the Clause today, there will still remain a most peculiar form of taxation on the cinemas, the so-called statutory levy. It is a form of taxation to subsidise production because of the peculiarity of the economics of the industry itself.
One of the things that the Treasury ought to know is the importance of maintaining the industry of film production. It is important not only because of its overseas earnings but because of the psychological significance of the exhibition of British films abroad. Not many hon. Members have mentioned this, but I know from my travels abroad and from consulting other people that in recent years British films have had an increasing amount of influence for this country, its ideas, its techniques, and its artistry, in all sorts of countries in which the cinema industry is expanding and not, as it is in this country, contracting.
If we fail to produce films to supply to these markets, other countries will supply them. In some of the Commonwealth countries, in South America and different parts of Europe, there has been a great development of markets for the exhibition of British films. This is a very good thing, but we cannot maintain the existing production industry unless there is a basic home market for the exhibition of films, and a reorganisation in the economy of the industry and the trade in the relationship between the exhibition of films and production. That will not come about until this tax has been removed. The trade will not concentrate as it ought to on its own internal reorganisation until this last penal measure, this discrimination against it as a form of entertainment in relation to others, has been abolished. The only thing that is of interest to the trade is the total abolition of the tax.

Mr. William Shepherd: I doubt whether the hon. Member for Newcastle-under-Lyme (Mr. Swingler) is right when he says that the existence of the tax will slow down the process of rationalisation. I agree that there may be some psychological factors which may tend that way, but the whole weight of


economic pressures is in an entirely different direction. In saying that, I do not mean to imply that I am in favour of keeping these extremely harsh economic pressures. There might be an argument for doing so, and I hope that the Committee will be mindful of that argument, because it is possible to prolong reorganisation to such an extent that one inflicts greater injury and hardship than if that reorganisation were brought about swiftly and without undue delay.
I have thought about these arguments towards rationalisation, and I have come to the conclusion that in the first place, those who are in this business are struggling so hard against such an enormous pressure of adverse circumstances that we ought to give them our consideration whatever the economic arguments. Secondly, in the main those who will have to go out of the business are now not in fact paying any tax, or at any rate very little, and therefore the maintenance of economic pressure to secure a more rapid process of rationalisation is not justified on pure economic grounds either. For these two reasons I want to see some relief for the cinema proprietors from the present burden of taxation.
We had a very interesting speech from the right hon. Gentleman the Member for Huyton (Mr. H. Wilson). It was interesting because he contradicted himself on what I thought was a fundamental point. He told us that he was appalled by the view of the Chancellor that we should maintain taxation on entertainment. It was something which outraged his soul, but earlier he said that what we have to do is to arrange for the tax to follow the entertainment. I suppose he was inviting the Committee to make a choice between those two points of view.

Mr. H. Wilson: I do not think that the hon. Gentleman followed what I was saying. I said that I was appalled that the Chancellor intended to make Entertainments Duty on cinemas permanent.

Mr. Shepherd: If the right hon. Gentleman reads his speech tomorrow he will see, and this is important, that he made the case, or was trying to, that taxation of entertainment as such was not an acceptable proposition.

Mr. Wilson: No, I did not.

Mr. Shepherd: The right hon. Gentleman made the point that taxation of entertainment was not a tenable proposition. It is not true that only the cinema bears Entertainments Duty. Gramophone records, which are demonstrably a form of entertainment, are taxed although some of us may not think that gramophone records are exactly entertainment. If we seek a principle, I think we might say that because of high costs, particularly of salaries, nowadays, we have been driven to taking Entertainments Duty off live entertainment but that Entertainments Duty still exists on mechanical entertainments, or on entertainments which are capable of being reproduced mechanically. I am not at all sure that it would be wise to do as some right hon. and hon. Members have done and rush to support the view that such a tax should be abolished in its entirety.
It is easy to say of almost any single tax which we discuss in this Committee that it amounts only to £X out of the £5,000 million of taxation and therefore the Chancellor can afford to dispense with it. It is certainly possible to say that about the £6½ million which the Chancellor hopes to draw from Entertainments Duty, if he is lucky, after he has brought the proposed reduction into operation. But I am concerned for a broader principle. We are tending to get far too much direct taxation in this country and far too little indirect taxation. With the exception of the United States, we are the country with the highest ratio of direct taxation compared with indirect taxation. If we continue to cut away at all forms of indirect taxation, we shall do away with the possibility of easing the burden on those who pay Income Tax, and there are above 80 million people who do so.
I ask the Committee to consider whether it is entirely desirable to abolish methods of indirect taxation one after another. I am inclined to support the view, which the right hon. Member for Huyton found so objectionable, that we should have a small, moderate tax on entertainment and that we might even pursue a policy of extending taxation on entertainment. I certainly think that we ought to have a much bigger slice from television than we get at present. I would remind the Committee that we get something from television and I have


no doubt that we shall get a bigger slice. I think that the case for having some small measure of taxation on entertainment is a sound one because of the need to spread the burden of indirect taxation.
I wish to say a word about the proposal announced last night by my right hon. Friend the Chancellor. I suppose I may say that I almost originated this proposal. I tried to sell it to the right hon. Member for Huyton a year or two ago and I have also tried to sell it to the cinema exhibitors. On several occasions I have recommended it to the Chancellor. I realised that there are defects in this proposal and that there are difficulties regarding its operation, but because it concentrates the advantage on those who need it most I think it is desirable to try to overcome the administrative difficulties and I wholeheartedly support the proposal.
5.15 p.m.
Should we in fact be doing an irreparable damage to the cinema industry by keeping a moderate tax in existence? My view is that we should not except perhaps in a purely psychological sense. The trouble facing the cinema industry is not the £6½ million of taxation which it has to provide, but the appalling fact that in a relatively short period of years attendances have dropped by half. If we are to have this industry on anything like a reasonable footing, it is clear, even to a person of the meanest intelligence, that it will be impossible to maintain anything like the present number of cinemas.
Were the tax entirely removed, there would still be a compelling economic need to reduce the number of cinemas now in existence. Therefore, I say that we cannot by an Act of Parliament be—I was going to say generous, but it is absurd to talk about being generous when one is dealing with other people's money. If we made the gesture and removed the tax entirely it would not reduce the imperative need to reduce the number of existing cinemas very materially. As I said earlier, it may well be that the only effect of eliminating the tax in its entirety at the present time would be to prolong the period during which the reduction in the number of cinemas took place, and to inflict much

more harm on the industry, and much longer-term harm, than would be strictly necessary. For these reasons I am inclined to accept the view of my right hon. Friend the Chancellor and his present proposals.
If there were further substantial reductions in attendances which would put into even greater jeopardy an ever-increasing number of cinemas, I should be prepared to reconsider the view which I have been stating to the Committee this afternoon. I base my present assumptions on there being a floor in attendances of about 650 million a year. If we experience reductions in attendances to below that point, we may well come to the conclusion that even the present level of taxation at £6½ million would not be tenable. But, in the light of the present figure of attendances, I take the view that the proposals of the Chancellor are the best to meet the immediate situation, and I hope the Committee will be advised to give them a trial, at any rate for a year.

Mr. A. E. Hunter: It is hard to follow the argument of the hon. Member for Cheadle (Mr. Shepherd) who has been arguing that it would be best to retain some form of tax in order to close cinemas because there are too many in existence. To me that appears an extraordinary argument. Every year hon. Members on this side of the Committee plead with the Chancellor to abolish the Entertainments Duty. I think it was the general opinion that in his Budget this year the Chancellor would abolish Entertainments Duty on cinemas, but there was nothing in the Budget although at a late hour last night the right hon. Gentleman made a minor concession.
In my opinion, my right hon. Friend the Member for Huyton (Mr. H. Wilson) was quite right when he said that the huge profits made today are not made by cinemas but by commercial television. Therefore, it seems to me that we are taxing an industry which is experiencing great difficulties. That is indicated by the fact that over 800 cinemas have been closed in the last few years and many others will be closed. It seems unfair that the cinema should be selected as the last form of public entertainment to be taxed. The tax has been removed from football and cricket


and from the living theatre, and quite rightly.
In some towns the loss of a cinema means the loss of a social amenity. Recently a cinema in Feltham High Street was closed. It had been open for many years. The closure occurred just after the Budget in April and the reason given was that as there was no remission of Entertainments Duty, the proprietors could not carry on. One can see quite clearly, therefore, that the Entertainments Duty has caused the closing of cinemas. This is not a tax on profits or one which may be absorbed in manufacturing or distributing costs. It is a tax on receipts. Whether a profit of £5 a year or £1 a year is involved, or whether a loss of £100 a year results, the tax goes directly upon receipts, and not upon profits. Therefore, I support the plea put forward by my hon. Friends that Entertainments Duty should be abolished in its entirety.
The cinema industry is an important industry. It employs roughly 80,000 people in its cinemas, in distribution and in film production. Any industry that employs that number of people is one to which the Government should give some consideration. I cannot imagine the hon. Member for Cheadle agreeing to a tax on the sale of cotton that could not be absorbed in the manufacturing costs, yet we are taxing the cinemas directly on their receipts. An industry on which 80,000 people depend for their living is, in my opinion, an important one, and the employee's need every consideration.
The hon. Member for Newcastle-under-Lyme (Mr. Swingler) was quite right in what he said about the importance of the production side of the film industry. There is quite a good export market in films which could expand, and a good export market must depend on a home market as well. I think that, if the tax were abolished, the industry could be reorganised to its own benefit. There would be no further excuses for it. It would have to produce good films in order to get the people into the cinemas. The abolition of the Entertainments Duty would remove any excuse on those grounds, and the cinema industry would have to show results.
I know that the cinema industry has made mistakes in the past and that there has been some reorganisation. There

could be more and better films. If the tax were abolished it would remove any excuses. Some cinemas have been in existence for 30 or 40 years. I remember some in London and Greater London which even during the war, with the bombs falling on several nights running, kept open and people went into them. It is extraordinary to me that cinemas can keep open with the bombs falling and yet that the Chancellor, by his Entertainments Duty taxation policy, closes them.
I appeal to the Chancellor to look again at the Entertainments Duty he levies, and if no further concession is given tonight I hope that we shall go into the Division Lobby to vote for the removal of the tax in its entirety.

Mr. Philip Goodhart: It is obvious that the Entertainments Duty, as levied at the moment, has a very uneven repercussion on the cinema-going public as a whole. I live in London and as far as I can make out, a cinema at the bottom of the street in which I live is doing extremely well. There are often long queues in front of it.
If by chance this cinema were to close there are many others to which ray family could easily get if they wished to do so because it is inconceivable that all the cinemas in London would close. In fact, the Chancellor, if he wished, could put up the Entertainments Duty to an astronomic level and Londoners would still be able to get to a cinema fairly easily if they had the money with which to pay for admission. But in other parts of the country the situation is very different. It is rather different in my own constituency. There a number of cinemas have closed, no doubt owing in part to the Entertainments Duty, and it is difficult for people living in certain areas to get, in the evening, to those cinemas that are still open in the neighbourhood.
We have heard during this debate and in previous debates on the subject in this Committee that there are some areas of the country in which it is almost impossible for people who want to go to the cinema to get there. The point I am trying to make is that, above all, the cinema is a local amenity. I feel that there is a very great deal for saying that, if one accepts the cinema as a local amenity, the local authority should be


allowed to set the rate of duty and Keep the revenue from it. In other words, Entertainments Duty should be turned into a local tax.
It might be that the Beckenham Council would decide that the rate of Entertainments Duty to be levied on local cinemas would, in fact, be nil. On the other hand, the Westminster City Council or any council of a large city might decide, if there were an ample number of cinemas in its area, that the levying of the tax was a legitimate means of getting some extra revenue for expenditure on desirable social purposes. Therefore, it might levy a stiff Entertainments Duty.
I can see very little object on ethical grounds for eliminating taxation from a whole field of entertainment as advocated by the new Clause. While we continue to have Purchase Tax on, say, stationery that is used in schools, I should have thought that on ethical grounds it would be much better to remove that tax entirely before doing away altogether with the Entertainments Duty.
I welcome the steps taken this year by the Chancellor to help in particular the small cinemas in the less built-up areas. However, I hope that in his Budget next year, he will consider, not eliminating Entertainments Duty altogether, but rather removing it from the field of central Government and turning it over to the local authorities.

Mr. Niall MacDermot: A number of hon. Members, including some of my hon. Friends and even my right hon. Friend the Member for Huyton (Mr. H. Wilson), have expressed surprise at the concession which the Chancellor announced last night. In doing so they remind me of the apocryphal story of Dr. Johnson, who was alleged to have been found one day by his wife kissing the maid. When his wife said to him, "I am surprised", he rebuked her and said, "You should be more correct in your English. I am surprised, you are astonished".
I can understand hon. Members being astonished by the decision to which the Chancellor has come in this matter, but I find it difficult to understand how they can be surprised, because this concession

has for some time been very widely predicted in the Press. The political correspondent of The Times has come in for some rather tart criticism of late in his ability as a prophet, but I think that in justice to him it is only right to point out that he predicted as far back as 25th May last that there was good reason to believe that the Chancellor would accept the new Clause— Reduction of Entertainments Duty—in the name of the right hon. Member for Blackpool, North (Sir T. Low). Indeed, the right hon. Gentleman indicated last night that he would accept the principle of it.
My hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler) said that we could have an interesting fortnight in discussing how this decision came to be made. I doubt whether it would be the wish of the House that we should spend quite as long that on the subject, but I should like briefly to investigate the matter. I suppose that if we were coming to it afresh it would be fairly easy to deduce how the matter would come about. It is usual for Chancellors to keep up their sleeves one or two million pounds which they propose to give away in concessions during the course of the Finance Bill debates. If they did not the debates would be even more arid than they sometimes are now.
5.30 p.m.
I suppose, also, that a prudent Chancellor—and prudence is surely among the virtues of the present Chancellor—would think to himself, "In making concessions, I suppose it is wiser to make those which will please my own back benchers rather than hon. Members opposite." He would then look at the Amendments and new Clauses which have been put down by Government back benchers and he would see one new Clause with a most distinguished array of names sponsoring it, including the chairman and vice-chairman of the Conservative Party Finance Committee, besides both joint secretaries of the Committee. He would then say to himself, "This looks a pretty good bet. The cost of it will be only about £2¼ million or £2½ million. That is the sort of sum I like to give away in Finance Bills Further, it is supported by some of the most distinguished Members of the Conservative Party Finance Committee."


The prudent Chancellor would probably select that new Clause as being worthy of a concession.
That is the way in which one would expect the decision to be reached; but, according to what appears to be a remarkably well-informed article in a certain publication, that is not the way things work in the Conservative Party. Of course, we realise that it works in mysterious ways. I have here an article published in a newspaper called the Daily Cinema, of 13th May last. It is written by the Daily Cinema political correspondent. I had not heard of him before. His name is J. W. Murray.

Mr. H. Hynd: What is his constituency?

Mr. MacDermot: He begins by saying:
A Government concession on Entertainments Tax is now generally expected in Parliamentary circles. Conservative M.P.s believe that the Chancellor may accept this proposal to cut out the first £20 of Tax per cinema each week.
He then sets out the names of the distinguished Members to whom I have referred, who are sponsoring the new Clause, and then shows a remarkable gift of prophecy, because he says that he thinks the new Clause is likely to be discussed together with Labour Party and Liberal Party new Clauses dealing with Entertainments Duty. He was not right about the Liberal one, but he says:
It is also possible that the Chancellor will accept the principle of the Tory new Clause bat prefer to table his own Motion on the Report stage.
He should consider becoming the racing tipster of the Daily Cinema. It was a very good prophecy.
The interesting thing is the way in which he suggests this is to come about. He points out:
So far the Chancellor has made no concessions and no others are in prospect which enhances the chances of Entertainments Tax relief. Nor is it conceivable that such leading Tory M.P.s would put their names to a Motion unless the Parliamentary 'grape-vine' had intimated favourable consideration.
If this well-informed gentleman is right, it seems that, instead of the Chancellor giving way because of the pressure of distinguished hon. Members opposite, when the Parliamentary grapevine of the Tory Party—whatever that institution is

—lets drop a hint distinguished Members of the party rush to lend their support to what seems to be a winner. It is like putting money on a certainty. I raise this matter only because it is interesting to know how Parliamentary proceedings work. When the Economic Secretary replies he may be able to tell us a little more about this Parliamentary grapevine and to inform us whether it is right that the Chancellor had intimated favourable consideration of the new Clause.

Mr. Geoffrey Hirst: I addressed the Committee at considerable length last night, and I shall not do so again, although many of the remarks made today have been very tantalising. I do not refer to the speech of the hon. Member for Lewisham, North (Mr. Mac-Dermot), but I am rather sorry that when he referred to the distinguished names supporting the new Clause he did not mention mine.

Mr. MacDermot: Perhaps I may point out that the author of the article predicted that the hon. Member for Shipley (Mr. Hirst) would move the new Clause.

Mr. Hirst: Having had the benefit of reading that article myself, I determined that that part of it was not going to be left out—which was not frightfully unreasonable of me in view of my very modest services in the matter in debates in this House over the last five or six years. Since we had a lot of fun over the article, I was determined that the hon. Member would not get away without a little comment about myself.
I rise to say that in view of the concession which the Chancellor made last night, and the assurances he has given concerning the Report stage, it will not be necessary formally to move the proposed new Clause—"Reduction of entertainments duty"—in the name of my right hon. Friend the Member for Blackpool, North (Sir T. Low) and others, including myself, although I naturally commended it to the Committee last night. I do not think that it is now necessary.
I appreciate from what the Chancellor said that there are many wise reasons why the wording of the Clause could not be accepted, and why he prefers to table something of his own. That is often the way. Back benchers do not have the benefit of the advice of the Parliamentary


drafting department. All they can do is to word a clause as best they can, in the knowledge that if the principle is accepted more acceptable words can be introduced to implement it.
I believe that the Economic Secretary knows that the Chancellor ventured to make a point about the dual use of a place of entertainment by more than one proprietor, and also raised the question of the levy. Certain people whose takings are less than £150 are excused from paying the levy, but if a concession is made in terms similar to those of the proposed new Clause to which I have referred it is possible that the gross figures of small exhibitors will be increased to such an extent that they will become liable to pay the levy. That could not have been the wish of the House or the Government in making the concession.
I hope that my hon. Friend will be able to say that that point has been considered. Subject to that, I should like to say that I and all those who are associated
with me are grateful to my right hon. Friend for making a 25 per cent. concession, which, in spite of the remarks that have been made, will be of great value and advantage to many small and medium-sized cinemas.

Mr. John Rankin: I am sorry that the speech of the hon. Member for Shipley (Mr. Hirst) has been so disappointing. I thought that he would have told us something more. We are entitled to hear about what has gone on, and to an answer to some of the pertinent questions which were put by my hon. Friends.
The hon. Member should have explained to the Committee why, for the first time in this long series of debates which have gone on from year to year since 1951, we have had the biggest list of Tory sponsors for the proposed Clause that the Order Paper has ever seen; this example of coming events casting their very substantial shadows before them. Government supporters have admitted that there was very strong pressure upon hon. Members from the cinema proprietors throughout the whole country. It is a fair deduction that that pressure was then applied to the Chancellor.

Mr. Hirst: I did not press this too far. There are limits to what any hon. Mem-

ber can say in inflicting himself upon the Committee. The pressure upon hon. Members to support the Clause came substantially from the extremely good circular sent out by the Cinematograph Exhibitors' Association, asking hon. Members to support which Clause they felt politically they could best support. It went to exhibitors throughout the country. Many hon. Members were asked to add their names to the proposed Clause, and between 70 and 80 did so.

Mr. Rankin: That explanation would be all right if it were not for the fact that for years the C.E.A. has been sending out very good circulars advocating the very course which Government supporters now sponsor, and that they fell largely upon deaf ears. There must have been some other sort of influence. With my hon. Friend the Member for Newcastle-under-Lyme (Mr. Swingler), I did my best to secure as many signatures as possible to a Motion urging the Government to abolish the tax. Strange to say, not one hon. Member on the Government side found it convenient to place his or her name to that Motion. Dark hints were spread around that we did not need to worry because it was going to be all right. How did those hints originate? Who was telling whom? Someone knew something, but no one was willing to talk.
With all respect to the hon. Member for Shipley, I suggest that somehow or other, if not through him, the feelings and desires of those who sit behind the Chancellor were conveyed to the Chancellor who was then faced with the question, "At what price can I buy them off? What is the cheapest sum that will keep them quiet?" The cheapest sum was £2½ million. It was the 30 pieces of silver over again, increased, of course, by the rise in the cost of living. That was the lowest sum that they were prepared to accept.
5.45 p.m.
I want to try a last-minute appeal, or a last-ditch stand, whichever metaphor the Economic Secretary chooses, to get him to realise that £2½ million is quite insufficient. It will not stave off the problems that invest the industry and he knows it. I want to ask a question which
I think the Chancellor did not deal with last night. I thought the back benchers would have communicated to


the Chancellor, through the unusual channels, that they wanted the Clause, the whole Clause and nothing but the Clause. They did not get that. The Chancellor said, "No. I cannot accept the retrospective part of the Clause."

Mr. Nabarro: My right hon. Friend got into trouble once before about that.

Mr. Rankin: Yes. Last year in the Budget it was retrospective from the middle of July until a date in May. [Interruption.] If I am wrong I shall stand corrected in due course, bow my head and apologise, but that is my information. Last year, the so-called £14½ million was made retrospective. I venture to put it at £4½ million because the figure was purely imaginary. It never existed. Who got the £14½ million? Nobody, because the amount
of tax that the Chancellor expected to collect never materialised and because 50 per cent. of what was collected came nearer to £6 million, or even £4½ million than it did to the £14½ million.
I want the Economic Secretary to the Treasury to think on this. There are roughly three groups in the industry. There is the small cinema group, with which we have dealt. On this side of the Committee, if we cannot get a whole loaf we shall not reject the little bit of bread that has been offered. We accept, on behalf of the small people for whom we have been striving for so long, this £20 weekly tax rebate. Then there are the major circuits who are interested in television and who, because the Chancellor gave them special help in the Budget by abolishing the tax on replacement tubes, are able to pay the cinema tax without any trouble. In any event, they can always pay.
Between those two groups—the one which is getting help and the other which does not need help—is the large one consisting of more than half the total, the exhibitors whom we call the "independent" people. They represent nearly 2,500 cinemas and are suffering very badly indeed. I know many of them, with cinema houses of first-class quality which have seating accomodation of the 2,000–2,500 capacity type. In Glasgow today some of them have closed or are about to close because of the incidence of the tax. One of them was sitting here last night listening to

the debate. He has been faced with that position.
These people will not get the help they ought to have by merely accepting the Tory Clause. It is not sufficient. If this seems funny to the Economic Secretary to the Treasury I would like to know where the joke is. It is not funny that we should have this burden on the bigger independent exhibitors who are receiving very little. They will receive something, but not sufficient. I hope that the Economic Secretary, like myself, does not want to see these people closing down.
I am not going into all the reasons for that. We have argued them time and again and the Economic Secretary is familiar with them. I want to make a proposal which would bring them in. I mentioned it last night. At the moment the tax-free allowance is 1s. 6d. Last night I suggested that the Chancellor, in a tidier and more acceptable fashion, could achieve the object he wants under the new Clause in the name of the right hon. Member for Blackpool, North (Sir T. Low) by changing the 1s. 6d. to 2s. For some strange reason he said that was not practicable. I think those were his words. Unfortunately, I cannot quote him because the report of his speech is not yet available to us. Why 1s. 6d. should be workable and 2s. not workable is something which perhaps the Economic Secretary will be able to explain, because now I ask him to make it not 2s., but half a crown.

Mr. Shepherd: Surely the hon. Member is not proposing to the Committee that in order best to help the small and medium cinema owners we should abandon this proposal for a rebate and raise the tax-free limit? That would help all the larger circuits, whereas the proposal which has been made takes greatest advantage of the reductions given.

Mr. Rankin: I do not think the hon. Member has been following me with his usual assiduity. Both these proposals would achieve the same purpose. If we allow the £20 to be deducted from the total tax liability, that will apply to the man who is liable for £200 or £300 of tax as much as to the man liable for £20 of tax.

Mr. Shepherd: Surely the hon. Member realises that if we allow £20 a week


out of £20 tax it is a 100 per cent. relief, but that if we allow it out of £300 the percentage is very much smaller.

Mr. Rankin: We said all this last night in the absence, for excellent reasons I am sure, of the hon. Member for Cheadle (Mr. Shepherd). I do not want to go on to argue it again. The hon. Member has merely repeated what I am trying to say. He may have been saying it better, and that may be the reason for his interrupting. I was saying that the £20 relief from liability does not mean so much to the man with a big cinema as to the man with a small cinema. I used the argument last night that if we can have abolition of the tax for one group we could have it for all. We said all that last night and I do not want to repeat it today. I suggest that if we dealt with this adjustment by dealing with the tax-free allowance we would bring in far more cinemas than we would by the suggested method.
To put it crudely, if we raised the tax-
free limit from 1s. 6d. to 2s. 6d., that would bring in the independents and the bigger type of cinema owner who, at the moment, has the bigger tax liability. It is important to do that because it is to them that we largely look for the regular application of the quota on which production depends. Fewer of these people apply for exemption and from them we get the greater amount of the statutory levy. That is why it is important that they should be considered more than the Government are now considering them. If we did what I am suggesting, in a full year it would cost £6 million and for the rest of this year it would cost £4 million.
I am asking for more money than the Tory back benchers are asking. They are getting off with a mean figure, but I say that £2½ million is not enough. Six million pounds is nearer the industry's needs if we are to treat it in a way which will enable it to carry out rationalisation with a freer mind than it now possesses because of the incidence of this Duty, and because the Government refuse to do what we on this side of the Committee want them to do—abolish the tax altogether.

Mr. Tom Brown: I have promised not to speak for more than a few minutes because so much was said last

night and has been said this evening about abolition of the tax on cinemas. It has been argued about for the past seven years. I want to put a point of view which is not the same as that of my hon. Friend the Member for Govan (Mr. Rankin), but which approaches the question from the effect of the Duty on cinemas in urban areas.
I am not pleading for large cinemas in big towns and cities, but for the proprietors of small urban area cinemas. Fortunately, or unfortunately, I have the honour to represent a constituency which has within it seven small urban authority areas. Five years ago there was a small cinema in each of five of those seven urban authority areas. They were playing a very important part in providing amenities for the people resident in those areas. Today there is only one such cinema. There is a great danger that unless something more tangible is done than what the Chancellor conceded last night that one cinema will go out of operation. If it does, the people who want to go to the pictures will have to travel five or six miles to a cinema. I do not think it fair that people in industrial areas such as Ashton-in-Makerfield and Ince should have to do that. The last cinema in Ince closed down a fortnight ago and the proprietors are not trying to dispose of it.
If this duty makes it compulsory for owners of the cinema in Princes Street, Ashton-in-Makerfield, to close down, there will be a population of 70,000 in my constituency with no cinema. I do not advance the argument that if the Chancellor conceded all we are asking all the cinemas which have had to go out of operation would be resurrected, but in my opinion it would prevent the closing down of the only cinema we have. That is why I advance the argument that if the Chancellor is not prepared to increase the concession he made last night, he might consider some other way of helping to maintain the existing cinema in Ashton-in-Makerfield.
I shall not weary the Committee by talking of the deterioration in attendances at that cinema. I am informed on good authority that it has come about because of Entertainments Duty. I am not in a position to say if that is so. I shall not give the figures of the fall in cinema receipts in my constituency,


although they are alarming. I welcome the statement made by the Chancellor last night that a case had been made for some concession to the smaller cinemas, and I put the question to the Economic Secretary not so much from the tax point of view as from the amenity point of view. We have said many times that, particularly from 25 years ago, we began to advance the argument very strongly that the cinema provided a long-needed amenity. We are allowing that amenity to disappear.
6.0 p.m.
I know that the argument has been advanced that television is replacing the cinema, and there may be some strength in that argument, but we must remember that, particularly in the rural districts and some of the smaller towns, people do not always possess the money necessary to purchase television sets, and they must therefore content themselves with seeing the picture at the cinema.
On that score I hope that the Chancellor will have another look at this problem. I know that it is not easy for him to cancel an Entertainments Duty when it means that he must find £14 million elsewhere. He has conceded £2½ million and he can go a little further without damaging the revenue of the country. On the ground of maintaining cinemas in the small urban authorities which are placed at a great disadvantage by comparison with the big towns and cities, I hope that the Chancellor will look again at this problem and see whether he can concede something more than he conceded last night. I support the new Clause.

Mr. E. C. Redhead: If this debate has been somewhat prolonged beyond our original expectations, it will be appreciated that it is clue to the nature of the Chancellor's intervention late last night and particularly to his announcement that he rejected the new Clause containing the Opposition's proposal for the total abolition of Entertainments Duty but accepted in principle the proposal in the new Clause in the name of the right hon. Member for Blackpool, North (Sir T. Low), which provides that the duty shall remain unchanged but that each cinema shall be allowed to retain up to £20 a week of the duty which is collected.
In the course of his observations the Chancellor laid great stress on the fact that the Entertainments Duty is not a charge upon the cinema exhibitor, but a charge upon payments for admission to a dutiable entertainment borne by the patrons of the cinema, and, therefore, that the exhibitor acts only in the capacity of an agent in charging, collecting and remitting the duty to the Customs and Excise Department.
Let me say straight away that, technically, that is and always has been the theory of Entertainments Duty. Nevertheless, I do not think that it is right in practice that the Chancellor should take advantage of that argument to contend that it is, therefore, not a burden upon the industry. Quite clearly, it is a burden on the industry to the extent that it places the burden upon the exhibitor, because, having to add to the basic charge for admission to an entertainment, he is limited in his ability to raise that basic charge to an economic level lest in so doing the sum total charged, including duty, reaches such a level that it still further adversely affects attendances at the cinema.
Let me, however, accept the Chancellor's conception of the duty as one which is paid not by the cinema proprietor but by the public. If the Chancellor contends that, what he proposes is to say to the cinema exhibitor, "You shall continue to charge and to collect the duty from the public, but you can pocket for yourself up to £20 of what you collect".
I submit that that is an entirely new principle in taxation practice and certainly one for which I have not been able to find any precedent. In itself, I regard it as a most undesirable precedent to introduce. It is as if the Chancellor were to say to the registered traders for Purchase Tax purposes—and they, after all, are also agents for the Revenue—"I know that Purchase Tax is a restriction upon your trade and that some of you are having a rather difficult time. What I propose to do is to allow all of you to go on extracting this tax from the public, but to allow you to pocket for yourselves a proportion of it".
I regard that as a thoroughly bad principle, and if it is introduced in this connection I venture to suggest that the Chancellor or his successor may well


rue the day when he created a precedent of this kind. Indeed, relief in this form is surely no more than a proposal to grant a subsidy of £2½ million from public funds to the cinematograph exhibitors, and I think that that is entirely wrong.
What is the Chancellor's justification for accepting the principle of this proposal? First, he says that he cannot afford to sacrifice revenue to the extent of about £9 million, which would be represented by accepting the Opposition's new Clause for the total abolition of duty, but that he is ready to forgo £2½ million. I can understand, although I am disappointed, that the Chancellor should make a gradual approach to the complete elimination of Entertainments Duty, as some of us thought he had been doing over the last couple of years. I can appreciate that the Chancellor finds it a very unattractive proposition to give up any particular and remunerative form of revenue. If he wants to make a gradual approach, however, I suggest that this is not an effective or desirable means of doing so.
Secondly, he says that his greatest concern and sympathy is for the small cinema or the single cinema in a small town. Again, I understand his concern, but this is not the way in which relief is already afforded to the small cinemas in the rural areas. There, it is not a question of permitting the proprietor to charge the duty in fact and in form and then allowing him to retain it in his own pocket but a question of definitely exempting him from the necessity of charging it to his patrons at all. Surely that is a much more desirable means of assisting the small cinemas, if that is the limit of the Chancellor's desire.
Accepting the Chancellor's limitation and his feeling that he cannot go the whole way—although I think that it would be justifiable to do so—and accepting his major concern to grant relief, to the limited extent that he feels that he can grant it, in order to give the greatest benefit where there is the greatest need, I again submit that the simplest and more orthodox way of doing it, without introducing any new and objectionable principle of the kind which I believe to be represented by the new Clause supported by hon. Members opposite, is that which

has been suggested of reducing the rate of duty on the cheaper seats.
It is a perfectly simple proposition for which there has already been ample precedent. It is a proposition of charging the duty not, as it is at the moment, on one-third of the excess over 1s. 6d. but on one-third of the excess over 2s., possibly, or 2s. 6d.—which ever is the appropriate figure to give a total relief up to the limit which the Chancellor feels that he can afford.
If that is not acceptable, or if the Chancellor feels that that proposition does not meet the objective he has in mind, I beg him to look again at the possibility of expanding the existing provisions in regard to small cinemas in rural areas and to adopt that pattern if he wants to confine his relief to those which he considers to be the most needy cases. If, despite our plea and our adherence to the Clause which we have tabled, the Chancellor nevertheless decides to adhere to the broad principle of the new Clause in the name of the right hon. Member for Blackpool, North I can assure him that my right hon. and hon. Friends and I will look at his own draft of that Clause with very great care.
I should like the right hon. Gentleman to bear in mind two particular points in that regard. First, I appreciate that in adopting the principle of that new Clause he has had to say that he could not accept the full measure of retrospection contemplated by the mover. I suggest to the right hon. Gentleman that, if he is to give even this small measure of relief, he should give it as quickly as possible. Therefore, I urge him to consider the possibility of making the starting date 10th June to coincide with the date upon which he made his announcement.
Secondly, I should like the Chancellor to consider whether it is appropriate to do this in the form of a fixed figure of £20, or whatever it may be, arbitrarily fixed in relation to each week, or whether there is a case for some provision for carrying over from week to week, especially for the benefit of small cinemas in places which depend very heavily on seasonal trade and patronage For example, those cinemas which have very small attendances during the winter will derive merely the remission of the small measure of tax which they collect.


while during the summer season they will obtain only £20 on their much higher revenues during that period.
The Chancellor went on in his speech last night to use rather ominous words. Reference has already been made to them. I want again to refer to the implication that he made that the Entertainments Duty on the cinema ought to remain a permanent feature. If we are wrong in the impression which we gained from the right hon. Gentleman's remarks, I hope that the Economic Secretary will reassure us on that point. It certainly betokens an entirely new line of approach. It is an argument which we have not heard in this connection before and we are entitled to know a little more about this development and what lies behind it.
The Chancellor suggested that cinema patrons should be expected to pay, in this form, a share of the general taxation which others bear in other ways. If that argument had any validity, it could as well have been applied to the live theatre, to dog racing, to horse racing, to football, to the speedway and the whole area which only two years ago was within the ambit of Entertainments Duty. But that argument did not deter the Chancellor's predecessor from removing those entertainments entirely from the burden of Entertainments Duty.
When the Government insist that there is still a case for the cinema in isolation to be subjected to this duty, whether it is a burden upon the patron or the proprietor, we are entitled to ask why it should be in respect of this particular form of entertainment and not in respect of others. It is an argument which might have had validity if Entertainments Duty had been conceived as part of a general balanced pattern of taxation, but it never was and now, applied exclusively to the cinema, it certainly is not.
6.15 p.m.
In earlier debates when discussing another tax I referred to the remarkable fact that taxes introduced as emergency measures, supposedly for limited purposes and periods, have a nasty habit of sticking. The Entertainments Duty is yet another tax of that character. We have been reminded that it was introduced in 1916 as a wartime measure to help pay for the cost of prosecuting the

First World War. Though truncated, as it has been, particularly in the last few years, it is still with us after forty-three years—a temporary measure which, after all, is becoming a little ancient for its temporary status.
One had hoped that what the Chancellor has done in this connection over the last two years indicated a realisation that there was no longer any logical justification for this duty. It has undergone various changes of rates and incidence in the intervening years, but latterly it has been steadily whittled away, first by the introduction of varying rates of duty for different classes of entertainment and then by an enlargement of reliefs and exemptions, particularly the so-called educational exemption, until it became such a racket as to become administratively impossible and I believe that the Department was only too glad to drop it and, indeed, it gave great impetus to the idea that the tax should be removed altogether from the live theatre.
In 1957 the then Chancellor abolished the duty altogether, except in respect of payments for admission to cinemas and television shows, reducing the rate of duty for these and cutting the total yield to £26 million a year. From that time, without any question, this duty became a plain discriminatory tax on one particular form of public entertainment. Though last year the Chancellor further reduced the duty in its application to the cinema, reducing the yield to £12 million, the duty still remains a discriminatory tax. The reductions were welcomed, but the Chancellor clings obstinately to the residue of revenue which this duty represents and refuses to see the logic of the case for its complete abolition, which is now more than overdue.
Whatever justification there ever was for the view that a special tax ought to be applied to the cinema industry in its more prosperous days has clearly vanished now that the industry is facing what is admitted on both sides of the Committee to be most heavy competition and has contracted—indeed, it is still contracting—with attendances having fallen sharply over the last few years. Even the imposition of a £1 duty on T.V. licences has done nothing to arrest the decline. It has only created for the Chancellor fresh problems in other directions, to which I shall not allude.
We have had the appalling spectacle of over 800 cinemas having had to close in the last five years. In many instances, the margin between solvency and actual loss and the decision whether to keep on in business or to close the cinema has been represented by the approximate equivalent of the amount of duty collected by the cinema. No one has ever attempted to suggest—I do not suggest tonight—that the decline in the cinema industry has been solely, or even mainly, due to the Entertainments Duty, but it is clearly an added burden of an unfair character in the circumstances. It is imposed, as has been repeatedly said in the debate, regardless of the economic position of the cinema. To impose it upon a losing concern is manifestly inequitable.
To push a cinema out of business by the marginal effect—I admit that it is no more than that—of Entertainments Duty, even though the Chancellor last night appeared to view that sort of prospect with an undue degree of equanimity, is bad in itself, not only for the exhibitor and his employees—there are a considerable number of employees in the cinema industry—but bad also in the loss of a local amenity.
The Chancellor must not run away with the idea that this local amenity aspect has relevance only when we are thinking of small towns. Surprisingly enough, there is only one cinema in the whole of my constituency, which is in the Outer London area. That cinema closed its doors fifteen months ago because it could not maintain itself in business by the bare margin of the tax it was collecting and passing on to the Revenue. I am happy to say that when the Chancellor gave his remission last year, in response to local pressure, I persuaded the proprietors to take their courage into both hands and see whether the remission would enable them to reopen.
They were public-spirited enough to realise that there was a loss of local amenity. They took the risk, and opened the cinema, but last week the manager wrote to me saying that notwithstanding the reduced rate of duty, it still remains a razor-edge proposition. They are still losing money, and he says that if this tax is maintained even at the present level his proprietors, quite clearly

cannot contemplate going on losing money. The balance will be tipped by the decision of the Chancellor.

Mr. Diamond: My hon. Friend referred to a cinema. Hon. Members on both sides have been concentrating on this as though the abolition of the tax, which would help the small cinema most, would solve the problem. The example given by my hon. Friend is typical of the single cinema being owned by owners—my hon. Friend said that it is run by a manager, and he talks of proprietors—owning a number of cinemas, who can continue to keep open a cinema that they are subsidising, and are prepared to subsidise, only if the others make profits. That is another reason for complete abolition of the tax.

Mr. Redhead: Yes, that is completely true in this case. This cinema is one of a circuit, so one knows that the proprietors have been able to sustain the loss only because they have been able to set it off against the slightly more profitable position of other cinemas in the combine. Quite clearly, however, that position cannot be maintained indefinitely. Unless there is further relief, the cinema will have to close again, and I shall have a constituency in the London area without a single cinema within its boundaries. That will be quite serious loss of a local amenity—and not least to many hundreds of old-age pensioners to whom, incidentally, this cinema happens to have been a very good friend.
We have abundantly demonstrated—and I shall not weary the Committee by going into this again—that the loss of business in this connection has a very serious effect on film production. We should remember that the film can play a very important part, not only in our export trade but in depicting British life and achievements to people in other countries. Anything that injures such an industry and makes it less capable of fulfilling that important function should be weighed in the balance against any trifling loss of revenue from a duty now truncated to its present level.
We have reached a stage when the imposition of any tax at all does more harm, and is more of an impediment to internal reorganisation of the industry


than can be justified by the revenue obtained—whether it be £9 million, or the £7 million which the Chancellor is now prepared to contemplate. Faced with this position, we should frankly recognise the duty as one that has outlived its purpose and justification, and that the only fair and logical thing to do is not to tinker with it, not to introduce doubtful expedients such as are contained in the new Clause standing in the name of the right hon. Gentleman the Member for Blackpool, North—which I believe to be objectionable in principle—not to introduce new complications and minor reliefs—and, therefore, more administrative machinery—but to get rid of it altogether.
We on this side have not been persuaded by anything the Chancellor has said to depart from that point of view, and unless the Economic Secretary has something more forthright and far-reaching to say than was said by the Chancellor last night, I can assure him that that is the view that we will take into the Division Lobby.

Mr. Erroll: The right hon. Gentleman the Member for Huyton (Mr. H. Wilson) and the hon. Member for Walthamstow, West (Mr. Redhead) have both referred to some of the remarks that my right hon. Friend made last night, and have tried to read into them far more than was intended. They both seemed to imply that my right hon. Friend suggested that the Entertainments Duty in its present form must necessarily last in perpetuity.
We are in a slight difficulty because, as my right hon. Friend did not speak until after 10.30 last night, his speech has not yet appeared in the OFFICIAL REPORT. However, I have here a typescript of what he said, and when I read the appropriate extract to the Committee, hon. Members will realise that there is nothing sinister in what he says. Referring to the Opposition's new Clause, my right hon. Friend said:
It would relieve entirely from indirect taxation about £80 million worth of consumer expenditure of a kind which is neither on basic essentials nor deserving of special encouragement on social grounds, and which, in the long term, I should think, would be able to support a moderate rate of duty along with analogous expenditure."—[OFFICIAL REPORT, 10th June, 1959; Vol. 606, c. 1132.]
—for example, on gramophone records, television sets and licences.
That is no more than a statement of the Government's policy towards indirect taxation, which should properly bear its share in producing the revenue required each year. In fact, my hon. Friend the Member for Cheadle (Mr. Shepherd) referred to the importance of not whittling away, year by year, the yield of indirect taxation, because the total yield from it is such an important part of the total revenue.

Mrs. Eirene White: Might we have a much clearer assurance on this very important point? Anybody who heard the Chancellor's words last night, or who has listened now to the repetition of those words—I myself was relying on The Times report which, in this instance at least, I think, is perfectly accurate—could take any view other than that it was the intention of the Chancellor to continue a tax upon the cinema industry in perpetuity—or during the term of his present office, at any rate—though, perhaps, at some lower level than the present one.
It is really most essential that we should be told quite specifically—and it is most essential that the industry should also be told—whether the industry must expect to continue to be taxed though, perhaps, at some slightly different level, and that there is no hope ever of the abolition of the tax because of the Government's views on indirect taxation.

The Chancellor of the Exchequer (Mr. Derick Heathcoat Amory): It might be simpler if I were now to intervene to say that what I said last night was not prejudging the requirements of the future at all. I do not know what those requirements will be, but when the time comes those requirements will no doubt be considered in the circumstances of that time.

Mr. Erroll: The hon. Members for Walthamstow, West and for Ince (Mr. T. Brown) referred to the amenity value of the cinema. In each of those constituencies the last cinema has either already closed, or is about to do so. But if, for example, the citizens of Ince want the cinema to remain open they should patronise it. It is no good their complaining, if they do, about the closing of the cinema there if they do not go to it when it is open. No cinema


can stay open if it is not patronised, whether or not there is Entertainments Duty. I would suggest, further, that the amount of Entertainments Duty levied on the cinema at Ince was probably very small indeed——

Mr. Diamond: Mr. Diamond rose—

Mr. Erroll: No; I gave way to a very long intervention a moment ago, and I must get on.
The right hon. Member for Huyton, and my hon. Friend the Member for Manchester, Blackley (Mr. E. Johnson) said that this tax was a discriminatory tax on one form of entertainment and that there was no taxation on any other entertainment. I have just obtained figures relating to the very high taxation on television. The television licence duty—that is, Excise Duty—yields, at present, £10 million, and the present yield of Purchase Tax on television sets is more than £30 million. That compares with a yield from Entertainments Duty on the cinema of about £9¼ million—which, if my right hon. Friend's proposals are accepted by the Committee, will be reduced by another £2½ million,—making the yield from the cinema £6¾ million as compared with over £40 million from television.
I am glad that the hon. Member for Walthamstow, West, referred to the reductions which the present Government introduced last year, and in earlier years. While not wishing to raise the temperature of the Committee, I think that I must point out that when a Socialist Government last had an opportunity of handling tax matters they put up the duty on the cinemas by about £7 million; that was in 1951—

Mr. Diamond: How many closed in that year?

Mr. Erroll: Film production was mentioned by the right hon. Member for Huyton, by the hon. Member for Newcastle-under-Lyme (Mr. Swingler) and by other hon. Members, and my right hon. Friend referred to it in some detail in his speech last night. All things considered, British film production is in a fairly healthy state today. I appreciate that there are not so many new films being produced, but they are probably of better quality, and longer, more expensive and worthwhile productions. I

do not think that one can go entirely on the number of films produced—the sort of figures quoted by the right hon. Gentleman and others.

6.30 p.m.

Mr. Rankin: Would the hon. Gentleman not agree that it takes from conception to delivery about eighteen months to produce a film, and that every film we are looking at today was started over eighteen months ago, when the industry was in a different position?

Mr. Erroll: I appreciate that, and, as the fall in attendances will probably flatten out at some time in the near future, producers might be wise to put more films into the pipeline for exhibition in the months to come.
In discussing the principle which lies behind the duty, which was discussed in some detail by the hon. Gentleman the Member for Walthamstow, West, I think that I ought to remind the Committee that this duty is a tax on cinema goers—on the patrons: it is not a tax on the industry or on cinemas, although the industry widely believes that it is. It is, in fact, a kind of convenient oral shorthand to regard it as a tax on the cinema industry.
In pressing for the abolition of this tax, those members who support that Clause are really pressing for a measure to help cinema proprietors, many of whom, I admit, but by no means all, are having a difficult time. We must be clear that the reduced amount of relief proposed by my right hon. Friend would go to the proprietors and not to the public, who would continue to pay the same ad mission prices as before. My hon. Friend the Member for Southampton, Test (Mr. J. Howard) pointed that out in a very useful and compact speech. As the case has been argued in Committee both last night and this afternoon the same thing would happen again.
The hon. Gentleman the Member for Walthamstow, West rather suggested that the new Clause in the name of my right hon. and hon. Friends would, if accepted, constitute a grave breach of principle, because the proprietors would retain the relief of duty instead of passing on the benefit to the public. There is nothing in that point, because the proprietors would be quite free to pass on the duty relief, if they so wished, to their patrons


in the form of lower admission prices. That would involve a certain amount of calculation as between one seat price and another, but it would be possible for them to pass it on over a period to patrons, if they wished to do so. There would be no compulsion on them to retain the relief of duty entirely for themselves, but we accept the fact that they probably would, as indeed they did last year, when very substantial reductions were given.
During the debate last night several
hon. Members, including my hon. Friend the Member for Tynemouth (Dame Irene Ward), quoted examples of cinemas which, but for the duty, would have made a profit. I need hardly remind the Committee that the duty is not a part of the cinema proprietor's profit and loss account and is not entered in the trading profits of the cinema for Income Tax and Profits Tax purposes, so it is a dangerous form of argument to use to say that, but for the duty, the cinema would have made a profit and that it had made a loss only because of the incidence of the duty. The fact is that it would still be making a profit but not necessarily quite such a big one. If, despite the prospect of duty being removed, the cinema still made a loss there would, in the long run, be no real hope for that cinema.

Mr. Swingler: What does all this mean? If admissions were at the same level and the admission prices were at the same level, to take an example given in Committee, is the hon. Gentleman trying to dispute the fact that a number of cinemas in the country would, if it were not for the tax, be operating at a profit instead of a loss? This is a very simple point. Does he dispute that?

Mr. Erroll: Not necessarily. The point I am trying to make is that, strictly speaking, any reduction in the duty ought to be wholly passed on to the patrons in the form of reduced admission prices and not used, as it will be, to supplement the profit and loss account of an individual cinema. That is why it is not possible to consider total abolition of the duty in the present circumstances. What supporters of the Opposition new Clause are really asking is that patrons should go on paying the same amount, but that the duty to be

remitted should go to the cinema proprietors and not to the Treasury.

Mr. Redhead: Would the hon. Gentleman explain how he would apply that argument in the case of the theatre and other forms of live entertainment?

Mr. Erroll: The yield from those other forms of entertainment was nothing like as big, nor was there the same regularity of attendances. This is a much bigger matter both with regard to revenue and the number of collecting points. If one is pressing for the total abolition of the duty, one is really asking that the patrons, if paying the same admission prices, should pay what would have gone to the Treasury over to the cinema proprietors. The Chancellor cannot possibly agree in the present circumstances to giving over £9 million to the cinema proprietors in this way.
My right hon. Friend recognises the very real difficulties of many of the cinema proprietors, particularly those operating small cinemas. Even so, I realise, as does my right hon. Friend, that it is not only a matter of the small rural cinema. There are special cases in large towns—particularly some of the very large capacity cinemas referred to by the hon. Member for Govan.
In studying the various possibilities of giving some form of relief to the industry my right hon. Friend was very attracted by the method proposed in the Clause—"Reduction of Entertainments Duty"—because it seems to be far and away the best method of giving maximum help without losing revenue which ought still to be collected from the cinema-going public. There are many advantages in this method. I should like to touch on them briefly and we shall probably be able to discuss them more fully when my right hon. Friend tables the new Clause on Report.
First, all cinemas throughout the country which at present pay duty will be helped. This means that almost half the cinemas at present collecting the duty from their patrons will be wholly relieved from paying any of the duty so collected. If one takes into account those cinemas which do not pay duty at present, that means that over half the cinemas in the country will no longer have to pay any Entertainments Duty whatsoever.
This method is much better than raising the admission price above which duty begins to be collected—a method particularly advocated by the hon. Member for Glasgow, Govan (Mr. Rankin). The method which he advocated was to raise the starting price from 1s. 6d. to 2s. 6d. a seat. That method is capricious and wasteful because a good deal depends on the seating structure of the individual cinema—whether it has a large number of high-priced seats or a large number of low-priced seats—and it also has the disadvantage of ensuring that all seats above the starting price get some reduction—even the very high priced ones—so that there would be a considerable loss of duty in respect of high-priced seats in cinemas which could well afford to go on paying duty as at present.
The next advantage in the proposed new Clause in the name of my right hon. Friend the Member for Blackpool, North (Sir T. Low) is that it is simple. The system would be simple to administer. The duty relief would be available each week and every cinema proprietor would know exactly how he stood. Finally, it is a reasonably fair relief. The small cinema would only begin to pay when it was doing well, and the large cinema—for example, those which are paying above £20 a week—would get over £1,000 a year in assistance towards their finances.
Like the right hon. Member for Huyton, I too have been receiving many letters on the subject of the Entertainments Duty. All mine have come through Members of Parliament from cinema proprietors. I have not noticed any letters coming from patrons complaining, because of course their method of complaining is to stay away from the cinema if they do not like the entertainment there. One must realise that this is mainly a problem of the cinema proprietors rather than of the patrons.
Of the many letters that I have received, some have included details of their profits or losses and the amounts paid in Entertainments Duty.

Mr. H. Wilson: Will the hon. Gentleman agree that if a cinema fails through inability to meet its costs owing to taxation, many patrons will then suffer? That has been happening all along

Mr. Erroll: It is surprising how few complain. A cinema usually closes because not enough patrons patronise it. That is the basic nature of the problem.
From the letters which I have received, I have analysed the figures which a number of proprietors have sent to me through their Members of Parliament, and I have tried out the different methods of relief which have been suggested, such as altering the starting price, relieving the first £20 and various other propositions. I have found that in almost every case the proposal for relieving the first £20 of duty gives the greatest degree of assistance. There are one or two special cases where another method would be more attractive, but for the majority of cinemas the most attractive method is that of relieving the first £20 of duty. This means that we can justifiably hope that the Chancellor's new Clause, when it is introduced later, will receive the support of the House, as it will be then.
In the meantime, therefore, I hope that the Opposition will not consider it necessary to divide the Committee, as my right hon. Friend has already promised a new Clause which will go a long way towards assisting the most hard-hit sections of the cinema industry.

6.45 p.m.

Mr. H. Wilson: Would the hon. Gentleman care to comment on the rather amusing story retailed by my hon. Friend the Member for Lewisham, North (Mr. MacDermot), about the grapevine? Would he say where the initiative lay in this matter? Did the Government put the back benchers up to the idea, or did the back benchers put the Government up to it? Would the hon. Gentle-may say, in whatever consultations there may have been, where the initiative lay and what was the nature of the consultations? We always cast some doubt on some of these stories that we read, but would the hon. Gentleman say what is the truth about this story, and, in particular, why the Government's acceptance of the proposal embodied in the new Clause tabled by the right hon. Member for Blackpool, North (Sir T. Low) was so widely forecast in the Press?

Mr. Erroll: Perhaps it would help if I explained that I never purvey rumours, nor do I ever try to track them down.


It would be a very time-consuming business. All I would say is that, as the right hon. Gentleman must appreciate from his own experience, if one side of the House tables a Clause or an Amendment or a Motion, and no names are appended to it, it is not an uncommon practice for hon. Members on the other side of the House to table their own Motion and to append their names, very often in large numbers. I think that that is the explanation of this episode to which the right hon. Gentleman and his hon. Friends attach quite undue and unnecessary importance.

Mr. Wilson: The hon. Gentleman is right in saying that that often occurs, but I do not think that we are attaching too much importance to this matter. By a lucky accident the hon. Members concerned seem to have hit upon just about the right figure which the Government think is right for this industry. Secondly, by a similar strange coincidence, they seem to have hit upon exactly the right method. A number of alternative methods have been indicated. There are, indeed, many—far more than have been indicated—and by sheer accident or brilliance and ingenuity, these hon. Members have hit on the exact method.
We understand that the hon. Gentleman was sitting up at 6 o'clock this morning working out these things, to see whether the contents of these letters which he
has received could be tested by this method. Would he tell us how it was that the back benchers were able so brilliantly to anticipate just what the Government were looking for? If the Government were looking for this method, why did they not put down a new Clause themselves? Will he not answer the question? I agree it is of minor importance, but it would he interesting to know whether at any stage there were consultations between representatives of the Government and the hon. Members responsible for the proposed new Clause.

Mr. Erroll: I do not wish to weary the Committee with this trivial point any longer. What the right hon. Gentleman has been saying is what we have already found to be the case. We are very fortunate in having so many brilliant minds among our own back benchers. I think the right hon. Gentleman was here when my hon. Friend the

Member for Cheadle spoke, and he may remember that my hon. Friend said that he had been campaigning for this sort of change for years. He is probably as capable of doing his sums as the right hon. Gentleman is. He has doubtless on this occasion succeeded in influencing important back benchers in the party in tabling a new Clause which we have found so agreeable.

Mr. Wilson: We would like to congratulate the hon. Gentleman on his hon. Friends. Could he give an assurance that there have been no consultations at all between the Government and the back benchers?

Mr. E. L. Mallalieu: We have had a most unsatisfactory reply from the Economic Secretary, not only about the grapevine but upon the main question which we have been debating for some considerable time. I do not propose to take more than two or three minutes at the outside because I want to deal with only one aspect of this matter.
It is admitted on all hands that cinemas are closing. It is also admitted, I think, that there is more than one cause—economic reasons, apart from the tax—but the fact is that there is this reason. Here are the Government maintaining this reason which it is within their power to remove.
It is mostly the small cinemas which are affected, and, in spite of the remarks of the Economic Secretary, I would call it the cinema tax. He calls it a tax on the consumers, the occupants of the seats. Of course, all taxes come down to the taxpayer in the end, but this is commonly thought of as the cinema tax, and, I submit, conveniently thought of in that way. It is the small cinema, in the main, which is suffering as a result of these causes, among them being the cause which the Government themselves maintain.
It is the small cinema, mainly, which is the one which serves the countryside. I do not suggest that the countryside is dotted with cinemas, small or large, but I am not for the moment in the least interested in Leicester Square, Mayfair or anywhere else which may have big cinemas. I am interested in the small cinemas in the country towns, the villages and the urban districts about which my hon.
Friend the Member for Ince (Mr. Brown) spoke. These cinemas constitute part of the amenity of the countryside. A great many of us have complained for a long time about the flight from the land. We know that there are reasons for that, apart from the closing of small cinemas, but lack of amenity is one of the factors causing men and, perhaps even more, their wives to become fed up with living in the countryside.
There is on the Government Front Bench at the moment and in the incumbency of the Treasury a man who at one time, I thought, was interested in the countryside and its agriculture. For a very long time I have suspected that the party opposite was the party of big business, the party which was not really interested in the countryside because its tune was paid for by big business, and the countryside and the agricultural industry could go by the board. The security given by the Labour Party's Agriculture Act of 1947 has been gradually whittled away and undermined until it has virtually gone. The security of tenure given by Labour to the tenant farmer has virtually gone.

The Deputy-Chairman (Sir Gordon Touche): Order. I hope that the hon. and learned Gentleman will relate his remarks to the new Clause.

Mr. Mallalieu: In my submission. Sir Gordon, they are very much related to the very thing we are discussing, which is, partly, amenity in the countryside. None of us wants to see these other things to which I just referred in passing become worse. This is one of the little things which will bring about a further deterioration if we have a Government in power who will not remove this extra straw which will otherwise do whatever it is that the last straw is supposed to do to the camel's back.
In my submission, many other people besides myself have been looking at the party opposite as the party of the things I have been discussing, the party which will not disclose its own accounts, the party which favours dividend stripping——

The Deputy-Chairman: That has nothing to do with the new Clause.

Mr. Mallalieu: If the party opposite does not want the country as a whole

to regard this as just another nail in the coffin of the countryside it had better abolish the tax completely.

Mrs. White: I do not wish to detain the Committee, but I feel that I must do so because of the extraordinarily unsatisfactory reply which we have had from the Economic Secretary. I have a great regard for the hon. Gentleman. I always find him most sympathetic, most entertaining and, as a rule, most intelligent, but I thought that he was well below his usual form, if I may say so, in what he has just said. I assume that he has been working so hard on other matters, perhaps on some of the rather abstruse new Clauses which come later, that he did not have quite sufficient time to master the subject we are meant to be discussing now.
Some of his remarks about the tax were so extraordinarily inapposite that I was surprised that they came from him at all. My right hon. Friend the Member for Huyton (Mr. H. Wilson) and others mentioned the relationship between television and the cinema. The Economic Secretary suggested that we were mistaken in putting forward as one of our arguments the fact that, with their very large profits, the television companies were not contributing as much to the Revenue as the cinema was obliged to contribute in its much more difficult situation. He introduced into his argument not just the television licence, but also the Purchase Tax paid on television sets.
This is really utterly irrelevant. If he wishes to do that he must put into the balance sheet between these two interests the Purchase Tax which the cinema exhibitor, for example, pays on his carpets and on his seating, the tax which is paid on a good deal of the equipment, the tax paid in the studios on their furnishings and equipment, and so forth. The hon. Gentleman's argument about the tax paid on television sets is really completely irrelevant. If I may say so, he should really think again if he is minded to argue at that level.
The Economic Secretary brought in a comparison about the taxation of the industry under the Labour Government, when the state of the cinema industry was infinitely more prosperous than it is now. I am not drawing any other conclusions from that at the moment. I


merely say that the state of the industry was very different then from what it is in 1959.
It was said by the Chancellor last night that the production side of the
industry need cause us little, if any concern. He said that it was not in any serious difficulty, and the Economic Secretary suggested that we really
need not worry about the production side at all. It is very important to know just what this relief we are discussing is meant to achieve, whether it is entirely for the exhibitors or is partly for other sections of the industry. Before we discuss that it should be said categorically that the production side of British films is not in a completely happy position.
One cannot judge everything by the statistics of the films which are in production at the present time by comparison with earlier years, but, nevertheless, the figures which my right hon. Friend the Member for Huyton gave in opening today's debate, showing a very sharp decline in British feature film production over the past three years, are, in our view, significant.
Earlier today, I asked one of our largest organisations, the Rank Organisation, about its production arrangements for this year. I was told that this year the Rank Organisation is directly responsible for ten feature films, compared with twenty last year. The other figures for the industry as a whole, obtained from the organisations responsible for producers in the industry, give rise to very serious concern.
Anyone who is in close contact with film producers today, who knows the difficulties which they are having in obtaining financial assurances and the way in which they had hoped that we might on this occasion, by abolishing the tax, have made their lives so much easier, cannot help feeling that the Chancellor is quite underestimating the difficulties of the production end of the industry. We are not at all convinced that the Chancellor is fully seized of the position in spite of the words he used yesterday about the general concern of the Government for the production end of the industry.
The nature of the tax remission which the Chancellor has told us he favours disturbs us very much, and the Economic Secretary made no answer whatever to

the point of principle raised by my hon. Friend the Member for Walthamstow, West (Mr. Redhead), who has had very great experience in these matters. As far as I could follow what the Economic Secretary said, he quite misunderstood the argument because he suggested that the answer to my hon. Friend lay in the fact that the cinema exhibitors did not pass on to the public the tax remission, but, to put it in this way, that they increased their price by the amount of the remission.
That is what it comes to. They failed to reduce the price. The original was not simply the price; it was the price plus the tax, if the hon. Gentleman can follow that. But that was not the basis of the objection to this form of tax remission, whether it was passed on to the consumer or not. The objection is that the tax is legally levied on the person who buys the ticket. The Chancellor was at great pains last night to go into detail about this. I copied his words down in the Library. He said:
This is a tax on admissions … on the patrons of the cinema primarily, and only indirectly … on the cinema proprietors. The cinema proprietors … are the collectors of the tax, in the same way as traders who collect Purchase Tax or retailers who collect the tobacco tax".
7.0 p.m.
Our objection to the method is that this is not a tax rebate because a tax cannot be rebated to somebody who has never paid it. What is said is, "The tax is collected from another set of people. It passes through your hands. It has not been paid by you, but we are telling you, nevertheless, that on its way from the consumer to the Customs and Excise you may keep a certain amount." That is the legal position. It is a very undesirable principle of taxation that somebody who has never paid the tax in the first instance but who acts merely as agent should be allowed to keep a proportion of it on its passage from the taxpayer to the Revenue. This is an important taxation principle. It has nothing to do with whether the customer ultimately gets the benefit of a price reduction.
The Economic Secretary paid no attention to this matter of principle which, I should have thought, would concern their Lordships at the Treasury.

Mr. Erroll: They are too practical.

Mrs. White: That may be, but I hope that they must still observe the law.
I should have thought that this matter would cause some concern to the Financial Secretary if not to the Economic Secretary. I hope that there has been consultation between them and that the Financial Secretary has satisfied his legal conscience.
This matter also has a practical significance, a point which was touched upon by the hon. Member for Shipley (Mr. Hirst) who, I think, now realises that the proposed method will bring one or two difficulties in its train. The hon. Gentleman asked the Economic Secretary to take some account of the difficulty which will be raised over the statutory levy. The statutory levy—I emphasise that it is statutory and therefore one must keep within the law—refers to the exemption which is given to a person whose net takings amount to £150 a week or less. Is the £20 regarded as Entertainments Duty or not? How will it be dealt with in the case of these marginal people who at the moment may be just below the £150 exemption, but who with the £20 may come in one period just above? Is or is not the £20 tax for the purpose of the statutory levy? Will fresh regulations be brought in, and, if not, why not?
We are entitled to know all these things and to know whether the matter has been fully worked out. We are entitled to have an indication from the Economic Secretary about where we stand. As I say, it appears to us on this side that a completely different principle of Entertainments Duty is being introduced, and if it is now to be regarded as a tax on the cinema proprietor we should not be told by the Chancellor in one breath that it is not a tax on the proprietor but on the patron and in the next breath that the tax should belong to the proprietor.
There is yet another difficulty on which we need a more precise definition for the reason which I gave earlier. I refer to the question of how far this remission is intended to apply to the industry as a whole and how far it is intended to remain entirely in the pockets of the exhibitor. As the Economic Secretary may know—after all, he was once at the Board of Trade—the practice in the industry is that the renter

takes a percentage of the takings on feature films at least, and the percentage is calculated after tax, the statutory levy and the industry's own protection levy against television has been taken into account. That means that if there is a change in the tax a proportion of it, according to the percentage agreed with the renter, will benefit the renter and therefore indirectly will benefit the producer. If the intention is that the £20 should remain in the pockets of the exhibitor, then the ordinary custom of the trade would have to be altered. If it is not altered, then the money does not go to the exhibitor exclusively. He gets only his percentage which he has agreed with the renter, and the rest goes to the other sections of the trade.
We on this side are very much concerned about the exhibitor, but we are also concerned about film production. One of the great advantages of our new Clause as opposed to the new Clause which is
likely to be tabled by the Government is that with total abolition there would be no difficulty and the benefit from total abolition would flow through the entire industry. The exhibitor would benefit, but so would the producer. We think that this is much more in the interests of the industry than an arrangement which would leave the entire benefit of any remission in the hands of the exhibitor only.
I grant that it is possible that this matter could be worked out domestically by negotiation in the trade, but that is not something over which we in Parliament have control. The Committee is entitled to know from the Government whether, for example, they have had consultations with the industry about this matter and whether the whole of the remission is to remain in the hands of the exhibitor or is to be taken into account for the other sections of the industry. Perhaps the Economic Secretary can tell us whether they have had such consultations.

Mr. Erroll: If any consultations are required they can take place before the new Clause is tabled.

Mr. Ellis Smith: We are very pleased with the way in which my hon. Friend is dealing with the matter, but while the Economic Secretary was speaking some of us were made uneasy with regard to


administration. I should like my hon. Friend to probe this matter in order to find out how it will be administered and whether the Cinema Proprietors' Association has been consulted on the method of administration.

Mrs. White: I was trying to do exactly what my hon. Friend wishes. I was trying to probe, as he said, but the result of the probing is to discover that there have been no consultations about administration, which is a matter of some substance.
We are entitled to put all these points to the Government. It is true that we shall have a later opportunity to discuss the matter in detail when the Government's own new Clause appears on the Notice Paper, but that will be on Report, and it will then be difficult to table Amendments. It is therefore only right that we should at this stage advance these points which have concerned us very much and on which the Committee is entitled to an explanation.

Mr. Diamond: Now that my hon. Friend has ascertained through her probing that there has been no consultation, would it not be right for her to ask why there has been no consultation? The Government have had since 13th May, since when it has been known that

they would accept an Amendment. The whole world has known since 13th May that the Government would accept it. What have they been doing in the intervening weeks?

Mrs. White: Before we know all that, we would have to know a little more about the workings of this grapevine. The Economic Secretary has been very unforthcoming about it.
These points which I have put should have been given by the Economic Secretary, and not by me, earlier in the debate. They are matters of substance which we shall certainly wish to probe carefully when we get the Government's new Clause. I doubt whether we shall get anything satisfactory tonight. The hon. Gentleman has not had time to do all his homework. We still feel emphatically that none of these complications need have arisen and that we are entirely justified in saying that total abolition would be better for the industry and would be much the most practical and satisfactory and an entirely legal way of dealing with this matter.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 162, Noes 196.

Division No. 128.]
AYES
[7.13 p.m.


Albu, A. H.
Edwards, Robert (Bilston)
Isaacs, Rt. Hon. G. A.


Allen, Scholefield (Crewe)
Edwards, W. J. (Stepney)
Jay, Rt. Hon. D. P. T.


Balfour, A.
Fletcher, Eric
Jeger, George (Goole)


Benson, Sir George
Foot, D. M.
Jenkins, Roy (Stechford)


Beswick, Frank
Forman, J. C.
Johnson, James (Rugby)


Blackburn, F.
Fraser, Thomas (Hamilton)
Jones, David (The Hartlepools)


Blenkinsop, A.
George, Lady Megan Lloyd(Car'then)
Jones, Elwyn (W. Ham, S.)


Bonham Carter, Mark
Gibson, C. W.
Jones, J. Idwal (Wrexham)


Bottomley, Rt. Hon. A. G.
Gordon Walker, Rt. Hon. P. C.
Jones, T. W. (Merioneth)


Bowden, H. w. (Leicester, S.W.)
Greenwood, Anthony
Kenyon, C.


Bowen, E. R. (Cardigan)
Grey, C. F.
Key, Rt. Hon. C. W.


Bowles, F. G.
Griffiths, David (Rother Valley)
King, Dr. H. M.


Boyd, T. C.
Griffiths, Rt. Hon. James (Llanelly)
Lawson, G. M.


Brockway, A. F.
Griffiths, William (Exchange)
Ledger, R. J.


Brown, Rt. Hon. George (Belper)
Grimond, J.
Lee, Miss Jennie (Cannock)


Brown, Thomas (Ince)
Hall, Rt. Hn. Glenvil (Colne Valley)
Lever, Leslie (Ardwick)


Burke, W. A.
Hamilton, W. W.
Lewis, Arthur


Burton, Miss F. E.
Hannan, W.
Lindgren, G. S.


Butler, Herbert (Hackney, C.)
Hastings, S.
McAlister, Mrs. Mary


Butter, Mrs. Joyce (Wood Green)
Hayman, F. H.
McCann, J.


Champion, A. J.
Healey, Denis
MacColl, J. E.




MacDermot, Niall


Clunie, J.
Henderson, Rt. Hn. A. (Rwly Regis)
Mclnnes, J.


Collick, P. H.(Birkenhead)
Herbison, Miss M.
McKay, John (Wallsend)


Corbet, Mrs. Freda
Hewitson, Capt. M.
McKay, Frank


Cronin, J. D.
Hilton, A. V.
MacPherson, Malcolm (Stirling)


Crossman, R. H. S.
Hobson, C. R. (Keighley)
Mallalieu, E. L. (Brigg)


Darling, George (Hillsborough)
Holt, A. F.
Mallalieu, J. P. W. (Huddersfd, E.)


Davies, Rt. Hn. Clement(Montgomery)
Houghton, Douglas
Mann, Mrs. Jean


Davies, Ernest (Enfield, E.)
Howell, Charles (Perry Barr)
Mellish, R. J.


Deer, G.
Hughes, Emrys (S. Ayrshire)
Mitchison, G. R.


de Freitas, Geoffrey
Hughes, Hector (Aberdeen, N.)
Moody, A. S.


Diamond, John
Hunter, A. E.
Morrison, Rt. Hn. Herbert(Lewis'm,S.)


Dodds, N. N.
Hynd, H. (Accrington)
Moyle, A.


Donnelly, D. L.
Hynd, J. B. (Attercliffe)
Mulley, F. W.


Ede, Rt. Hon. J. C.
Irvine, A. J. (Edge Hill)
Neal, Harold (Bolsover)




Noel-Baker, Francis (Swindon)
Rogers, George (Kensington, N.)
Thornton E.


Oliver, G. H.
Ross, William
Ungoed-Thomas, Sir Lynn


Oram, A. E.
Royle, C.
Viant, S. P.


Oswald, T.
Shinwell, Rt. Hon. E.
Wade, D. W.


Owen, W. J.
Silverman, Sydney (Nelson)
Warbey, W. N.


Padley, W. E.
Skeffington, A. M.
Weitzman, D.


Pannell, Charles (Leeds, W.)
Slater, Mrs. H. (Stoke, N.)
Wells, Percy (Faversham)


Parker, J.
Smith, Ellis (Stoke, S.)
Wells, William (Walsall N.)


Pearson, A.
Sorensen, R. W.
Wheeldon, W. E.


Plummer, sir Leslie
Soskice, Rt. Hon. Sir Frank
White, Mrs. Eirene (E. Flint)


Popplewell, E.
Sparks, J. A.
White, Henry (Derbyshire, N.E.)


Prentice, R. E.
Spriggs, Leslie
Williams, Rt. Hon. T. (Don Valley)


Price, Philips (Gloucestershire, W.)
Steele, T.
Williams, W. R. (Openshaw)


Pursey, Cmdr. H.
Stewart, Michael (Fulham)
Willis, Eustace (Edinburgh, E.)


Rankin, John
Stonehouse, John
Wilson, Rt. Hon. Harold (Huyton)


Redhead, E. C.
Strachey, Rt. Hon. J.
Zilliacus, K.


Rhodes, H.
Stross, Dr. Barnett(Stoke-on-Trent, C.)



Robens, Rt. Hon. A.
Swingler, S. T.
TELLERS FOR THE AYES:


Roberts, Goronwy (Caernarvon)
Taylor, John (West Lothian)
Mr. Holmes and Mr. J. T. Price.


Robinson, Kenneth (St. Pancras, N)
Thomson, George (Dundee, E.)





NOES


Agnew, Sir Peter
Fletcher-Cooke, C.
Manningham-Buller, Rt. Hn. Sir R-


Aitken, W. T.
Galbraith, Hon. T. G. D.
Marlowe, A. A. H.


Alport, C. J. M.
Gammans, Lady
Marshall, Douglas


Amory, Rt. Hn. Heathcoat(Tiverton)
Garner-Evans, E. H.
Mathew, R.


Anstruther-Gray, Major Sir William
Glover, D.
Maudling, Rt. Hon. R.


Arbuthnot, John
Godber, J. B.
Maydon, Lt.-Comdr. S. L. C.


Armstrong, C. W.
Goodhart, Philip
Medlicott, Sir Frank


Ashton, H.
Gough, C. F. H.
Molson, Rt. Hon. Hugh


Atkins, H. E.
Graham, Sir Fergus
Morrison, John (Salisbury)


Baldwin, Sir Archer
Grant-Ferris, Wg Cdr, R. (Nantwich)
Nabarro, G. D. N.


Balniel, Lord
Green, A.
Nairn, D. L. S.


Banks, Col. C.
Gresham Cooke, R.
Neave, Airey


Barber, Anthony
Grimston, Hon. John (St. Albans)
Nicolson, N. (B'n'm'th, E. &amp; Chr'ch)


Barlow, Sir John
Grosvenor, Lt.-Col. R. G.
Noble, Michael (Argyll)


Barter, John
Gurden, Harold
Oakshott, H. D.


Batsford, Brian
Harris, Frederic (Croydon, N.W.)
O'Neill, Hn. Phelim (Co. Antrim, N.)


Baxter, Sir Beverley
Harris, Reader (Heston)
Osborne, C.


Bell, Philip (Bolton, E.)
Harrison, Col. J. H. (Eye)
Page, R. G.


Bell, Ronald (Bucks, S.)
Heald, Rt. Hon. Sir Lionel
Pannell, N. A. (Kirkdale)


Bevins, J. R. (Toxteth)
Heath, Rt. Hon. E. R. G.
Partridge, E.


Bidgood, J. C.
Henderson-Stewart, Sir James
Peel, W. J.


Biggs Davison, J. A.
Hesketh, R. F.
Pickthorn, Sir Kenneth


Bingham, R. M.
Hicks-Beach, Mal. W. W.
Pilkington, Capt. R. A.


Bishop, F. P.
Hill, John (S. Norfolk)
Pitman, I. J.


Black, Sir Cyril
Hinchingbrooke, viscount
Pott, H. P.


Body, R. F.
Hirst, Geoffrey
Powell, J. Enoch


Boyd-Carpenter, Rt. Hn. J. A.
Holland-Martin, C. J.
Price, David (Eastleigh)


Boyle, Sir Edward
Hornsby-Smith, Miss M. P.
Prior-Palmer, Brig. O. L.


Brewis, John
Howard, Gerald (Cambridgeshire)
Rawlinson, Peter


Brooman-White, R. C.
Howard, John (Test)
Redmayne, M.


Bryan, P.
Hughes, Hallett, Vice-Admiral J.
Rees-Davies, W. R.


Bullus, Wing Commander E. E.
Hughes-Young, M. H. C.
Remnant, Hon. P.




Ridsdale, J. E.


Burden, F. F. A.
Hulbert, Sir Norman
Rippon, A. G. F.


Butler, Rt. Hn. R. A. (SaffronWalden)
Hutchison, Michael Clark(E'b'gh, S.)
Robinson, Sir Roland (Blackpool, S.)


Carr, Robert
Hutchison, Sir James (Scotstoun)
Roper, Sir Harold


Cary, Sir Robert
Hyde, Montgomery
Ropner, Col. Sir Leonard


Clarke, Brig. Terence (Portsmth,W).
Hylton-Foster, Rt. Hon. Sir Harry
Russell, R. S.


Conant, Maj. Sir Roger
Irvine, Bryant Godman (Rye)
Sharples, R. C.


Cooper, A. E.
Jenkins, Robert (Dulwich)
Shepherd, William


Cordeaux, Lt.-Col. J. K.
Johnson, Dr. Donald (Carlisle)
Simon, J. E. S. (Middlesbrough, W.)


Corfietd, F. V.
Jones, Rt. Hon. Aubrey (Hall Green)
Smithers Peter (Winchester)


Craddock, Beresford (Spelthorne)
Kerr, Sir Hamilton
Spearman, Sir Alexander


Crosthwaite-Eyre, Col. O. E.
Lagden, G. W.
Spens, Rt. Hn. Sir P. (Kens'gt'n, S.)


Crowder, Sir John (Finchley)
Leather, E. H. C
Stanley, Capt. Hon. Richard


Crowder, Petre (Rulslip—Northwood)
Leburn, W. G.
Stevens, Geoffrey


Cunningham, Knox
Legh, Hon. Peter (Petersfield)
Steward, Sir William (Woolwich, W.)


Currie, G. B. H.
Lindsay, Martin (Solihull)
Storey, S.


Dance, J. C. G.
Linstead, Sir H. N.
Stuart, Rt. Hon. James (Moray)


Davidson, Viscountess
Lloyd, Maj. Sir Guy (Renfrew, E.)
Studholme Sir Henry


D'Avigdor-Goldsmid, Sir Henry
Longden, Gilbert
Summers, Sir Spencer


Deedes, W. F.
Loveys, Walter H.
Taylor, Sir Charles (Eastbourne)


de Ferranti, Basil
Lucas, Sir Jocelyn (Portsmouth, S.)
Teeling, W.


Dodds-Parker, A. D.
Lucas-Tooth, Sir Hugh
Thomas, Leslie (Canterbury)


Doughty, C. J. A.
McAdden, S. J.
Thorneycroft, Rt. Hon. P.


du Cann, E. D. L.
Macdonald, Sir Peter
Thornton-Kemsley, Sir Colin


Dugdale, Rt. Hn. Sir T. (Richmond)
McLaughlin, Mrs. P.
Tiley, A. (Bradford, W.)


Duncan, Sir James
Maclean, Sir Fitzroy (Lancaster)
Tilney, John (Wavertree)


Eden, J. B. (Bournemouth, West)
McLean, Neil (Inverness)
Turner, H. F. L.


Erroll, F. J.
McMaster, Stanley
Turton, Rt. Hon. R. H.


Fell, A.
Macpherson, Niall (Dumfries)
Vickers, Miss Joan


Finlay, Graeme
Maddan, Martin
Wakefield, Edward (Derbyshire, W.)


Fisher, Nigel
Maitland, Hon. Patrick (Lanark)
Walker-Smith, Rt. Hon. Derek







Wall, Patrick
Webster, David
Wilson, Geoflrey (Truro)


Ward, Rt. Hon. G. R. (Worcester)
Williams, Paul (Sunderland, S.)



Ward, Dame Irene (Tynemouth)
Williams, R. Dudley (Exeter)
TELLERS FOR THE NOES


Webbe, Sir H.
Wills, Sir Gerald (Bridgwater)
Mr. Chichester-Clark and




Mr. Whitelaw.

New Clause. —(ADDITIONAL PERSONAL RELIEF FOR UNMARRIED HOUSE HOLDERS.)

In relation to a claimant who proves that for the year of assessment he is the occupier of a house or of part of a house occupied as a separate dwelling, section two hundred and ten of the Income Tax Act, 1952 (Personal relief), shall have effect with the substitution of references to one hundred and ninety pounds for references to one hundred and forty pounds (which indicate the amount of relief for a claimant not living with or maintaining his wife).—[Mr. Houghton.]

Brought up, and read the First time.

Mr. Douglas Houghton: I beg to move, That the Clause be read a Second time.
I invite the Committee now to turn its attention once more to personal reliefs from Income Tax. The new Clause proposes an additional personal relief for unmarried householders.

Mrs. Jean Mann: On a point of order. I understand that this Clause is tied to the Clause—"Additional personal relief for widowed householders"—in the name of my hon. Friend the Member for Southampton, Itchen (Dr. King) and myself which reads:
In relation to a claimant who proves that for the year of assessment she is a widow and is the occupier of a house or part of a house occupied as a separate dwelling, section two hundred and ten of the Income Tax Act, 1952 (Personal relief), shall have effect with the substitution of references to one hundred and ninety pounds for references to one hundred and forty pounds (which indicate the amount of relief for a claimant not living with or maintaining his wife).
I understood that both would be taken together. Is not that right?

The Financial Secretary to the Treasury (Mr. J. E. S. Simon): I understood that it was agreed that at any rate we should discuss that Clause with this one and I think that it would be convenient.

The Temporary Chairman (Sir Robert Grimston): That would be in order. The other Clause has not been selected, but it may be discussed.

Mr. Houghton: Thank you, Sir Robert. If my hon. Friend the Member for Coatbridge and Airdrie (Mrs. Mann)

had given me one more moment I intended to refer to that.
The new Clause in my name and the names of my hon. Friend now proposes an additional personal relief for unmarried householders, and that applies to both men and women. The new Clause in the name of my hon. Friend the Member for Coatbridge and Airdrie and my hon. Friend the Member for Southampton, Itchen (Dr. King) would restrict this proposed additional allowance to widows who are householders. My Clause is not restricted in that way.
When the Clause first appeared on the Notice Paper some newspapers picked it up and I have had a number of letters from people about it, especially from those who are separated spouses. They wanted to make sure that if any concession was given to unmarried householders they would not be excluded. I think that I could say that if the new Clause were adopted, it would apply to them as well. I had in mind that all those to whom at present the single person's relief for Income Tax purposes applies would receive the benefit of the additional personal relief now proposed. I am proposing that the £140 single person's relief should be raised to £190. I am sure that the Chancellor has already noticed that he would be a beneficiary under this proposal as he is an unmarried householder. I hope that fact will not deter him from accepting it.
A Clause of this nature has been on the Notice Paper before. I first put it down in 1952. It was debated in Committee on 11th June, 1953, and I put it down again last year but it was not then called. On 11th June, 1953, the reply of the Economic Secretary at the time, now the Paymaster-General, was so conciliatory that I was prevailed upon by my right hon. Friend the present Leader of the Opposition, to withdraw my proposal. That is always a risky thing to do, because it implies that one is convinced by the arguments against it and one has given up the ghost. That was not the position at all.
The reason why I withdrew it in 1953 was that the then Economic Secretary referred to the fact that this was one of


the matters which was no doubt under consideration by the Royal Commission on the Taxation of Profits and Income, which it was. That brings me to an admission that not only have I the past record of this Clause against me but I now have the Royal Commission against me, and I am sure that I have the Inland Revenue against me. Under that treble handicap I must now try to move the Second Reading of this new Clause.
I know all the answers about this, but I am going to plod on notwithstanding. This matter arose because there is a widespread feeling today that the personal reliefs no longer represent the differences in capacity to pay between one taxpayer and another within the same taxation classification. The single persons-middle—aged women, widows and bachelors—who are maintaining a home of their own get no more tax relief than the adolescent leaving school, who may be living at home and contributing very little to the maintenance of the household. It can be argued that the adolescent leaving school may be contributing quite a lot to the maintenance of the household and that many single persons who are not householders are lodgers or are occupying furnished accommodation and would be excluded from the provisions of this proposal.
I admit all that, but I am trying to find some way to bring the reliefs more into line with the economic circumstances of the taxpayers concerned. In 1953, I referred to the fact that I had been approached by a number of constituents about these single women employed mainly in the textile industry. It was not an accident that the spinsters' pensions movement, recently wound up, began and prospered in the textile areas where so many women began work as young girls and have continued at work ever since. They were the daughters of weavers and spinners who tried to maintain their homes after their parents died. There is no doubt that many of them, getting less pay perhaps than the men, are in difficulties in maintaining their little homes which they cherish so much.
The additional allowance which I ask should be given would be tax on £50, so that the unmarried householder would get a personal relief of £190 instead of £140. On the grounds of equity, I think

that this proposal represents a broad division between one set of unmarried taxpayers and another. I cannot pretend that the line of demarcation is absolutely clear and unmistakable.
Then there are questions of administration. I am never allowed to forget them. It can be argued, of course, that these personal reliefs should be based on some simple ascertainable facts, on such questions as, "Are you married or are you not?" "Have you children or have you not?" "Have you a dependent relative or have you not?" and "Have you a life assurance policy or have you not?"
I grant that it may be a little more complicated to ask a taxpayer, "Are you a householder or not?", because there are some difficult legal cases on what constitutes a household, but I have tried to bring into the new Clause the conventional definition of a householder as
… the occupier of a house or of parts of a house occupied as a separate dwelling …
I believe that this has been taken as the basis for rent restriction purposes for many years. I am sure that the Financial Secretary, with his legal training, will tell me how many pitfalls there can be in a definition, however simple or complicated, of what constitutes a householder.
I think that there is no more difficulty about asking this question of the taxpayer than many other questions that have to be asked of taxpayers, and I believe that there is more chance of getting the truth in answer to this one than to a great many questions asked by the Inland Revenue Department. This is a fairly simple ascertainable fact if there were any real cause for doubt about the bona fides of the claim. The Inland Revenue proceeds mainly on the basis that the taxpayer is a truthful person and his or her word is usually taken unless there are grounds to suspect the contrary.
7.30 p.m.
The administration difficulties are not insuperable and I do not think they are formidable. I say in conclusion that while this may not be the ideal solution, I think that the personal relief will need to be reviewed before very long. The Royal Commission on the Taxation of Profits and Income, in paragraphs 152 and 208, had something to say about


the need to make these allowances simple. It discounted any theory that they really represented an assumption of ability to pay by reference to mode of life; that these reliefs were based on the marital status or on family responsibilities, and that we could not carry them too far. I agree that if we carry the reliefs too far we discriminate between the people who live in unfurnished accommodation and those who live in furnished accommodation, in private hotels, those who are lodgers and so on. So, obviously, there is a limit to this kind of refinement in the personal reliefs, and this is just a tentative move forward which I think is justified.
Of course, a great many single persons feel that they are unfavourably treated by reference to the rather special treatment of married women who are earning. One simple example is that of a single person earning £400 who pays this year £28 17s. 2d. in tax. A married man earning £400, with a wife going out to work and earning £350 a year, would pay only £28 4s. 1d. in tax. That is the difference in the tax burden upon a married couple without children, and wife earning, and a single person; yet both the married men and the single person may be householders.
That, I hope, is a fairly convincing case in favour of this proposed Clause. It is a matter of opinion as to whether this kind of concession should be embarked upon, but we on this side of the Committee feel that something of the kind is justified and we recommend the Chancellor to give the proposal favourable attention.

Mrs. Mann: I beg to second the Motion.
I shall also speak in support of the proposed Clause 69—"Additional Personal Relief for Widowed Householders"—in the name of my hon. Friend the Member for Southampton, lichen (Dr. King) and myself. My hon. Friend the Member for Sowerby (Mr. Houghton) has talked of the difficulties of the single man or woman who has a house over his head and is faced with all the commitments pertaining to that position. There is a far stronger case for the widow whose late husband, if she was working before

she was widowed, could claim £380 per annum of Income Tax relief. When her husband dies, however, she is treated in the same way as the Chancellor would treat a young girl who is working, and she can claim only £140. So she finds herself not only surrounded by her grief and that of her children, but she probably has to take on her own shoulders the burden of a mortgage, repairs to her house, replacements and so on. Yet she is treated as though she were a single girl with no responsibilities.
A married couple gets relief of £240. I often wonder why the extra £100 is given when a man takes unto himself a wife. It is difficult to understand, because if one concludes that it is because he has an additional burden in his wife, that argument is dispelled by the fact that if she goes out to work as a married woman he receives a further £140 in respect of her. So it cannot be because of the upkeep of the wife. One can only assume that it is because of the domestic upkeep that enters into every household and which has to be found by the householder himself or herself, such as increased local rates, the increased cost of repairs of electrical equipment, and so on.
The widow, therefore, is treated very badly when her Income Tax relief drops from £380 to £140, and that is not the only blow she receives from our Governments. I say "Governments" in the plural because there is no party aspect as regards the past. The right hon. Gentleman the Minister of Pensions says to her, "If you go out to work you lose your entire pension". I have spoken previously in the House about the case of one of my constituents. She is a young widow with three children who has had to go out to work as a typist, earning £7 10s. a week, since the death of her husband. When her husband was alive he shouldered all the burdens she now carries and he received the entire allowance. He paid insurance for years. When I hear debates in the House about private versus public enterprise, I often think of the National Insurance Scheme and its treatment of widows. It should be remembered that this young women's husband paid insurance for years and years and yet on his death there was nothing for his widow because she goes out to work. If it were the Prudential or the Pearl——

The Temporary Chairman: Order. The hon. Lady is getting a little wide of the proposed Clause.

Mrs. Mann: I apologise, Sir Robert. I should say that the Committee would be wildly indignant at that kind of treatment from a private insurance company.
The Minister of Pensions penalises the widow for going out to work, and then the Chancellor does the same thing by reducing the allowance to that of a single girl. In other words, the widow is between the devil and the deep sea. I would not for a moment compare the right hon. Gentleman with the raging, roaring, angry sea. I should imagine that "Smooth runs the water where the brook is deep" is much more suitable in this case. The right hon. Gentleman's smile always encourages me to believe that I shall get somewhere and have some concession from him, and then I am reminded that he who can smile and smile can be a villain.
The right hon. Gentleman has the chance to distinguish between the two new Clauses which we are discussing. We are not asking that the widow should get the £240 allowance which is given to husband and wife. We are asking only that she should get that little extra, that £50 extra, to show that the Government are not entirely regardless and heartless in their attitude to her struggles.

Dr. Horace King: I support the new Clause of my hon. Friend the Member for Coat-bridge and Airdrie (Mrs. Mann). I take the opportunity as a back bencher to express thanks to the Chair for the arrangements which have been made so that we know which Clauses have been selected. I also thank you for your kindness, Sir Robert, in permitting us with the Clause which my hon. Friend the Member for Sowerby (Mr. Houghton) moved to discuss the other Clause seeking to give at least some benefit to widows.
My hon. Friend the Member for Sowerby is a great authority on tax law and Chancellors of both parties have appreciated the tremendous contributions which he has made to our debates year after year. I was interested to find him expressing the view that we could tailor taxes, adapt taxes, to the kind of people who paid them. In one or two other matters the Treasury has already

moved on those lines, and we now ask the Chancellor sympathetically to consider the new Clause of my hon. Friend the Member for Coatbridge and Airdrie which would distinguish the widow from other taxpayers in one special way.
I believe that the Welfare State still does not do enough for widows, especially elderly and childless widows, although I for one admire what the present Minister of Pensions has done for the widowed mother. Unless a widow has private means or has an independent profesional status, she is still the most unfortunate of women. With the loss of her husband, she passes from security to hardship and poverty. Many widows have no skill except wifehood and motherhood, the greatest skills of all, and they find it very difficult after bereavement to go out and earn a living yet, quite unwittingly, almost at the moment of bereavement, the Chancellor strikes them a blow.
If they are householders, he treats them quite differently from how he treated them when they were married women. The Clause would help the widow who tried to keep her old home going. It would maintain for her the sort of tax concession which she had when her husband was alive. It must be very difficult for her to keep her home. I know that she could move into rooms, but the widow will want to keep the home which means so much to her. She has either to live on a widow's pension or try to earn a living under very great difficulties, and in modern society, unless she has a professional skill, that must mean that this burden becomes very great.
7.45 p.m.
We are not asking that the Chancellor should give the widow anything more than she had before she lost her husband. I admit that this little new Clause is merely tinkering with the great problem. I think that we need a nonparty study group to study the very difficult problem of how adequately to treat widows at various ages and at various stages of their lives. At any rate, this proposal would give one group of them a little favourable treatment as compared with other single persons—if one can call a widow single—and I hope that the Chancellor will sympathetically consider it.

Dame Irene Ward: I support the new Clause of the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann). This problem of widows, especially those who have homes to maintain, and their struggles deserves a first-class examination. I was in the House of Commons during the war and I well remember why additional allowances were given to married women. It was to encourage them to go out to work and to make their war effort, which they did readily and gladly. What had been agreed during the war remained as a privilege.
I do not for a moment suppose that my right hon. Friend will accept the Clause today, but the hon. Member for Southampton, Itchen (Dr. King) has put his finger on the point. What worries me about all this is that year after year we discuss this sort of matter and we never seem to get anywhere. If the Report of the Royal Commission on the Taxation of Profits and Income can be used by my right hop. Friend to defeat that proposal, we hear about it. When it goes the other way, we do not hear about it.
My right hon. Friend has produced a balanced Budget under which widows paying tax of any kind will benefit. I do not suppose that the hon. Lady will get the concession she seeks. But what I want to do is to stake a claim. When the next Finance Bill comes along, whatever party is in power, it is unlikely that a similar Clause will be called
by the Chair. That is just the way things go. It might be another couple of years before this matter can be raised again.
I want an assurance from my right hon. Friend that this matter will be studied and that we shall be able to get down to trying to balance the relationships between tax reliefs. I hope that my right hon. Friend will give that assurance, for we shall then at least know that the matter is being considered.

Mr. Simon: The hon. Gentleman the Member for Sowerby (Mr. Houghton) very disarmingly referred to the past record of the Clause, the attitude generally of the Inland Revenue to the further refinements in the allowances, and the recommendations of the Royal Commission. That makes it all the more difficult to reject his arguments. He referred to my right hon. Friend the Chancellor of the Exchequer being a beneficiary

under the Clause and he may take it that under those circumstances I have been put up to reply, and indeed he would be right in doing so, because I am sorry that I cannot recommend the Committee to accept the Amendment.
As the hon. Gentleman reminded the Committee when widows' pensions were last discussed my right hon. Friend the Paymaster-General said that he was glad that the matter had been put to the Royal Commission, because this was precisely the kind of point on which the Chancellor would benefit from its advice. The advice of the Royal Commission, put very cogently and by a body of men who made a close study of the fiscal system when they were sitting, was adverse to this particular conception. With great respect to my hon. Friend the Member for Tynemouth (Dame Irene Ward), it is not true that we accept the Royal Commission's proposals only when they are not in favour of the taxpayer. On a considerable number of occasions its recommendations have been accepted in favour of the taxpayer.
The outstanding example of that, and one that would appeal particularly to my hon. Friend, is the raising in 1955 of the starting point of liability to tax. There was also the raising in 1957 of the earned income relief, quite apart from a whole host of more technical aspects of the law where major reforms have been carried through in the last few years.
Having considered the matter carefully, the Report of the Royal Commission said:
We have been pressed to admit not merely the forms of family circumstances that we shall categorise later but also such matters …
and then it enumerates several, ending with
… household maintenance. All these claims have their persuasive elements …
and we who have heard hon. Gentlemen this afternoon know how persuasive they can be, but the Royal Commission went on to say:
But they must be judged in the light of a rule to which we have had again and again to refer our own tentative proposals: income tax is an annual tax that has got to be administered.
The Report states later on:
It cannot therefore proceed on the basis of minute inquiries into a multiplicity of personal circumstances of individuals.


Again, in the other paragraph that was referred to by the hon. Gentleman the Report of the Commission states its conclusion:
We were forced to the conclusion that better equity will be achieved by holding to a few clearly identifiable, generally acceptable, grounds of allowance covering a substantial number of cases than by trying to obtain more delicate adjustments that depend on circumstances less precisely definable and capable of more individual variation.
When the Royal Commission said:
… minute inquiries into a multiplicity of personal circumstances of individuals …
I do not think it was referring to the sort of inquiries that the Inland Revenue has to make. Hon. Gentlemen opposite quite rightly referred to those, but I think there would be administrative difficulties. The definition of a householder might provide difficulties and the passage from the Rent Acts which was quoted is not a very propitious guide to us, because it has led to a mass of litigation which we would wish to avoid.
I do not, however, put the administrative difficulties in the forefront here. I do not think they are insuperable. The real difficulty is that there is no proper ground for this distinction. It was said that this represents a broad division between one set of unmarried taxpayers and another. No doubt it does objectively, but when one considers the circumstances it does not. All unmarried people want a roof of some sort or another over their heads, and it is very difficult to say that if they are lodgers or paying guests they should be worse off so far as the Income Tax allowance is concerned. They very often have to pay as much as a lodger or as a paying guest as they would as a householder and be very much less comfortable for their pains.
I think that if this distinction were drawn a great many unmarried people who were in lodgings or living as paying guests in somebody else's household would feel deeply aggrieved that they did not have the same allowance. It, therefore, seems that not only on the broad grounds that have been given by the Royal Commission, but also when one applies the principle to the particular circumstances of this case, it is not one which the Committee would wish to accept.
The hon. Gentleman mentioned the position of the married woman, as indeed did my hon. Friend the Member for Tynemonuth, and the hon. Lady the Member for Coatbridge and Airdrie (Mrs. Mann). The higher allowance is given to a married man because it is an allowance for two people, and indeed for two incomes, because the income of the wife is aggregated in our fiscal law with that of the husband. It is true, as the hon. Gentleman the Member for Sowerby said, that there is particularly favourable treatment for the married woman who goes out to work, for the reason that was given by my hon. Friend the Member for Tynemouth. It was a measure that was deliberately adopted to encourage as many married women as possible to enter or remain in employment. It was also a recognition of the extra expense of keeping a home going under such circumstances. But the Royal Commission suggested that we were over-generous in that respect. I do not, however, believe that many Governments will be keen on withdrawing that allowance once it has been given, and I think we might get into serious trouble with my hon. and gallant Friend the Member for Worthing (Brigadier Prior-Palmer) if we attempted to do so.
It, therefore, seems to me that the proposal of the hon. Gentleman is not acceptable, and with very great respect I would say that each of these arguments applies to the Clause standing in the name of the hon. Lady the Member for Coatbridge and Airdrie. I met the hon. Lady a number of times when I was at the Home Office when she was assiduous in the interests of home safety. Very often, as she knows, she won me over completely on that matter. I hope she will forgive me if I say that I find her rather less convincing today and that she has not won me over on her fiscal proposals.
Exactly the same considerations apply. Why should a widow who is forced to go into lodgings, where she may have to pay as much, be treated worse than the widow who is a householder? Quite clearly, the position of any widow deprived of her support in life must excite the sympathy of the Committee, and I think both the hon. Lady and the hon. Member for Southampton, Itchen (Dr. King) put that matter in a way


which appealed to the Committee. Nevertheless, it comes to this. Is a manipulation of the fiscal system the best way of helping widows, or should it be done through the social services? The hon. Gentleman is quite entitled to say, as he did, that the Welfare State does not do enough for widows—very fairly adding the qualification that he did. That is a quite tenable point of view, but it seems to me to be wrong to infer from it that more should be done through the fiscal system.
On the contrary, the argument is that more should be done through the social services; because if we operate through the fiscal system we do not give the help where it is most needed; indeed, the hon. Lady's proposal would most benefit those who least need help and least benefit those paying the lowest level of tax. It would give the greatest help to those why pay the standard rate on the appropriate part of their incomes. Although these proposals have been put forward persuasively, and in a way which appeals to the Committee, they are not ones which I could recommend the Committee to accept.

8.0 p.m.

Mr. Houghton: I am very disappointed with the Financial Secretary's reply. I had hoped that even if he had found my Clause unacceptable he would have been able to look more favourably upon that of my hon. Friend the Member for Coat-bridge and Airdrie (Mrs. Mann), for she has an advantage over me. My hon. Friend the Member for Southampton, Itchen (Dr. King), who put his name on the Notice Paper in support of my hon. Friend's new Clause, not only turned up but spoke effectively and movingly upon it. My Clause has some very influential support on paper, but owing to other pressing Parliamentary commitments I have been unable to assemble the bodyguard in support of it.
None the less, I still have a little argument left on this matter. Despite what the Royal Commission said about the principles underlying these personal reliefs and the avoidance of further refinements in connection with matters

which had to be inquired into, it made recommendations in favour of further reliefs. One was in respect of the child between the ages of 16 and 21 who was totally incapacitated; another was for additional relief in respect of the person who was 100 per cent. disabled. The Royal Commission also proposed that a
widower or widow with young children need not necessarily prove that his or her housekeeper was resident as a condition of qualifying for housekeeper relief. Other proposals were made which the Government have not yet felt able to accept.

The Royal Commission must still be a guide in these matters, but it is no longer a conclusive authority. Its Report is at least five years old, and in these days anything which is five years old is in danger of becoming out of date—although I must be careful not to say anything which may prejudice the arguments of my hon. Friend who may be dealing with a subsequent new Clause concerned with total incapacity, which was the subject of a recommendation by the Royal Commission.

My hon. Friend the Member for Coat-bridge and Airdrie will live to fight another day. If she cannot put forward any further argument, she will at least have the opportunity of pressing her new Clause to a decision at a later stage. For the present, it is the new Clause which I have moved, and that alone, upon which the Committee has to come to a decision. I still feel that the balance of argument is in my favour and although it is an inconvenient hour at which to press the matter to a Division, I am assured by my right hon. and hon. Friends that I should not allow their personal convenience to stand in the way of supporting my new Clause in the Division Lobby. Being kindly disposed to them all, I propose to give them the opportunity of doing so.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 138. Noes 183.

Division No. 129.]
AYES
[8.4 p.m.


Allen, Scholefield (Crewe)
Bottomley, Rt. Hon. A. G.
Burton, Miss F. E.


Balfour, A.
Bowden, H. W. (Leicester, S.W.)
Butler, Herbert (Hackney, C.)


Beswick, Frank
Brockway, A. F.
Butler, Mrs. Joyce (Wood Green)


Blackburn, F.
Brown, Thomas (Ince)
Champion, A. J.


Blenkinsop, A.
Burke, W. A.
Clunie, J.




Collick, P. H. (Birkenhead)
Jay, Rt. Hon. D. P. T.
Popplewell, E.


Cronin, J. D.
Jeger, George (Goole)
Prentice, R. E.


Crossman, R. H. S.
Jenkins, Roy (Stechford)
Price, Philips (Gloucestershire, W.)


Darling, George (Hillsborough)
Johnson, James (Rugby)
Pursey, Cmdr. H.


Davies, Ernest (Enfield, E.)
Jones, David (The Hartlepools)
Redhead, E. C.


Deer, G.
Jones, J. Idwal (Wrexham)
Rhodes, H.


de Freitas, Geoffrey
Jones, T. W. (Merioneth)
Robinson, Kenneth (St. Pancras, N.)


Diamond, John
Kenyon, C.
Rogers, George (Kensington, N.)


Dodds, N. N.
Key, Rt. Hon. C. W.
Ross, William


Ede, Rt. Hon. J. C.
King, Dr. H. M.
Royle, C.


Edwards, Robert (Bilston)
Lawson, G. M.
Silverman, Sydney (Nelson)


Edwards, W. J. (Stepney)
Ledger, R. J.
Skeffington, A. M.


Fletcher, Eric
Lee, Miss Jennie (Cannock)
Slater, Mrs. H. (Stoke, N.)


Forman, J. C.
Lever, Leslie (Ardwick)
Smith, Ellis (Stoke, S.)


Fraser, Thomas (Hamilton)
Lindgren, G. S.
Sorensen, R. W.


George, Lady Megan Lloyd(Car'then)
McAlister, Mrs. Mary
Soskice, Rt. Hon. Sir Frank


Gibson, C. W.
McCann, J.
Sparks, J. A.


Gordon Walker, Rt. Hn. P. C.
MacColl, J. E.
Spriggs, Leslie


Greenwood, Anthony
MacDermot, Niall
Steele, T.


Grey, C. F.
McInnes, J.
Stewart, Michael (Fulham)


Griffiths, David (Rother Valley)
McKay, John (Wallsend)
Stonehouse, John


Griffiths, Rt. Hon. James (Llanelly)
McLeavy, Frank
Strachey, Rt. Hon. J.


Griffiths, William (Exchange)
MacPherson, Malcolm (Stirling)
Stross,Dr.Barnet(Stoke-on-Trent,C.)


Hale, Leslie
Mallalieu, E. L. (Brigg)
Taylor, John (West Lothian)


Hall, Rt. Hn. Glenvil (Colne Valley)
Mallalieu, J. P. W. (Huddersfd, E.)
Thomson, George (Dundee, E.)


Hamilton, W. W.
Mann, Mrs. Jean
Thornton, E.


Hannan, W.
Mellish, R. J.
Ungoed-Thomas, Sir Lynn


Hastings, S.
Mitchison, G. R.
Viant, S. P.


Hayman, F. H.
Moody, A. S.
Warbey, W. N.


Healey, Denis
Morrison,Rt.Hn.Herbert(Lewis'm,S.)
Weitzman, D.


Henderson, Rt. Hn. A. (Rwly Regis)
Moyle, A.
Wells, Percy (Faversham)


Herbison, Miss M.
Mulley, F. W.
Wells, William (Walsall, N.)


Hilton, A. V.
Neal, Harold (Bolsover)
Wheeldon, W. E.


Hobson, C. R. (Keighley)
Noel-Baker, Francis (Swindon)
White, Mrs. Eirene (E. Flint)


Houghton, Douglas
Oliver, G. H.
White, Henry (Derbyshire, N.E.)


Howell, Charles (Perry Barr)
Oram, A. E.
Williams, Rt. Hon. T. (Don Valley)


Hughes, Emrys (S. Ayrshire)
Owen, W. J.
Williams, W. R. (Openshaw)


Hughes, Hector (Aberdeen, N.)
Padley, W. E.
Willis, Eustace (Edinburgh, E.)


Hunter, A. E.
Pannell, Charles (Leeds, W.)
Wilson, Rt. Hon. Harold (Huyton)


Hynd, H. (Accrington)
Parker, J.



Irvine, A. J. (Edge Hill)
Pearson, A.
TELLERS FOR THE AYES:


Isaacs, Rt. Hon. G. A.
Plummer, Sir Leslie
Mr. Holmes and Mr. J. T. Price.




NOES


Agnew, Sir Peter
Craddock, Beresford (Spelthorne)
Hinchingbrooke, Viscount


Aitken, W. T.
Crosthwaite-Eyre, Col. O. E.
Hirst, Geoffrey


Alport, C. J. M.
Crowder, Sir John (Finchley)
Hobson, John (Warwick &amp; Leam'gt'n)


Amory, Rt. Hn. Heathcoat (Tiverton)
Cunningham, Knox
Holland-Martin, C. J.


Anstruther-Gray, Major Sir William
Currie, G. B. H.
Holt, A. F.


Arbuthnot, John
Dance, J. C. G.
Hornby, R. P.


Armstrong, C. W.
Davidson, Viscountess
Hornsby-Smith, Miss M. P.


Atkins, H. E.
D'Avigdor-Goldsmid, Sir Henry
Howard, Gerald (Cambridgeshire)


Baldwin, Sir Archer
Deedes, W. F.
Howard, John (Test)


Balniel, Lord
de Ferranti, Basil
Hughes Hallett, Vice-Admiral J.


Barber, Anthony
Dodds-Parker, A. D.
Hughes-Young, M. H. C.


Barlow, Sir John
Doughty, C. J. A.
Hulbert, Sir Norman


Barter, John
Dugdale,Rt. Hn. Sir T. (Richmond)
Hutchison, Michael Clark (E'b'gh.S.)


Batsford, Brian
Duncan, Sir James
Hyde, Montgomery


Baxter, Sir Beverley
Eden, J. B. (Bournemouth, West)
Hylton-Foster, Rt. Hon. Sir Harry


Bell, Philip (Bolton, E.)
Erroll, F. J.
Irvine, Bryant Godman (Rye)


Bell, Ronald (Bucks, S.)
Finlay, Graeme
Jenkins, Robert (Dulwich)


Bevins, J. R. (Toxteth)
Fisher, Nigel
Johnson, Dr. Donald (Carlisle)


Bidgood, J. C.
Fletcher-Cooke, C.
Johnson, Eric (Blackley)


Biggs-Davison, J. A.
Galbraith, Hon. T. G. D.
Jones, Rt. Hon. Aubrey (Hall Green)


Bingham, R. M.
Gammans, Lady
Kerr, Sir Hamilton


Bishop, F. P.
Glover, D.
Lagden, G. W.


Black, Sir Cyril
Godber, J. B.
Leather, E. H. C.


Body, R. F.
Goodhart, Philip
Leburn, W. G.


Bonham Carter, Mark
Graham, Sir Fergus
Legh, Hon. Peter (Petersfield)


Bowen, E. R. (Cardigan)
Grant-Ferris, Wg Cdr. R. (Nantwich)
Lindsay, Martin (Solihull)


Boyd-Carpenter, Rt. Hon. J. A.
Green, A.
Linstead, Sir H. N.


Brewis, John
Gresham Cooke, R.
Lloyd, Maj. Sir Guy (Renfrew, E.)


Brooman-White, R. C.
Grimond, J.
Longden, Gilbert


Bryan, P.
Grimston, Hon. John (St. Albans)
Loveys, Walter H.


Burden, F. F. A.
Grosvenor, Lt.-Col. R. G.
Lucas, Sir Jocelyn (Portsmouth, S.)


Butler, Rt.Hn.R. A. (Saffron Walden)
Gurden, Harold
Lucas-Tooth, Sir Hugh


Carr, Robert
Harris, Frederic (Croydon, N.W.)
McAdden, S. J.


Cary, Sir Robert
Harris, Reader (Heston)
Macdonald, Sir Peter


Chichester-Clark, R.
Harrison, Col. J. H. (Eye)
McLaughlin, Mrs. P.


Clarke, Brig. Terence (Portsmth, W.)
Heald, Rt. Hon Sir Lionel
McLean, Neil (Inverness)


Conant, Maj. Sir Roger
Heath, Rt. Hon. E. R. G.
McMaster, Stanley


Cooper, A. E.
Henderson-Stewart, Sir James
Macpherson, Niall (Dumfries)


Cordeaux, Lt.-Col. J. K.
Hesketh, R. F.
Maddan, Martin


Corfield, F. V.
Hicks-Beach, Maj. W. W.
Maitland, Hon. Patrick (Lanark)







Manningham-Buller, Rt. Hn. Sir R.
Powell, J. Enoch
Teeling, W.


Marshall, Douglas
Price, David (Eastleigh)
Thomas, Leslie (Canterbury)


Mathew, R.
Prior-Palmer, Brig. O. L.
Thorneycroft, Rt. Hon. P.


Maudling, Rt. Hon. R.
Redmayne, M.
Thornton-Kemsley, Sir Colin


Mawby, R. L.
Rees-Davies, W. R.
Tiley, A. (Bradford, W.)


Maydon, Lt.-Comdr. S. L. C.
Remnant, Hon. P.
Turner, H. F. L.


Medlicott, Sir Frank
Ridsdale, J. E.
Turton, Rt. Hon. R. H.


Nabarro, G. D. N.
Roper, Sir Harold
Vickers, Miss Joan


Nairn, D. L. S.
Ropner, Col. Sir Leonard
Wade, D. W.


Neave, Airey
Russell, R. S.
Wakefield, Edward (Derbyshire, W.)


Nicolson, N. (B'n'm'th, E. &amp; Chr'ch)
Sharples, R. C.
Walker-Smith, Rt. Hon. Derek


Noble, Michael (Argyll)
Shepherd, William
Ward, Rt. Hon. G. R. (Worcester)


O'Neill, Hn. Phelim (Co. Antrim, N.)
Simon, J. E. S.(Middlesbrough, W.)
Ward, Dame Irene (Tynemouth)


Osborne, C.
Smithers, Peter (Winchester)
Webbe, Sir H.


Page, R. G.
Spearman, Sir Alexander
Webster, David


Pannell, N. A. (Kirkdale)
Stanley, Capt. Hon. Richard
Williams, Paul (Sunderland, S.)


Partridge, E.
Stevens, Geoffrey
Williams, R. Dudley (Exeter)


Peel, W. J.
Steward, Sir William(Woolwich, W.)
Wills, Sir Gerald (Bridgwater)


Pickthorn, Sir Kenneth
Stuart, Rt. Hon. James (Moray)
Wilson, Geoffrey (Truro)


Pilkington, Capt. R. A.
Studholme, Sir Henry



Pitman, I. J.
Summers, Sir Spencer
TELLERS FOR THE NOES:


Pott, H. P.
Taylor, Sir Charles (Eastbourne)
Mr. J. E. B. Hill and Mr. Whitelaw.

The Temporary Chairman: The next new Clause selected is headed "One hundred per cent. disabled." Although they are not selected, the following new Clauses may be discussed with it: "Blind persons," "Incapacitated child over the age of sixteen years," "Relief for disabled persons", and "One hundred per cent. disabled wife."

Mr. H. Wilson: I understand, Sir Robert, that although the new Clause entitled, "Blind persons" is not selected, it can be discussed with the new Clause headed, "One hundred per cent. disabled" and there was an understanding with the Chairman of Ways and Means that there could be a Division on the new Clause headed "Incapacitated child over the age of sixteen years", put formally without debate.

The Temporary Chairman: Yes, that is so.

New Clause.—(ONE HUNDRED PER CENT. DISABLED.)

The following section shall be added to Part VIII of the Income Tax Act, 1952:—
228A. If the claimant proves that during the whole of the year of assessment—

(a) he has been in receipt of a war disablement pension or an industrial injury pension granted by the Ministry of Pensions and National Insurance and determined by reference to one hundred per cent, disablement, or
(b) though not in receipt of a one hundred per cent. disablement pension or industrial injury pension he nevertheless is disabled in manner and degree equivalent to one hundred per cent. disablement,

he shall be entitled to a deduction from the amount of income tax with which he is chargeable equal to tax at the standard rate on one hundred pounds".—(Mr. Cronin.)

Brought up, and react the First time.

Mr. John Cronin: I beg to move, That the Clause be read a Second time.
The purpose of this Clause is comparatively clear. It has the intention of enabling disabled persons to deduct £100 from their gross income for taxation purposes provided that they are either in receipt of a 100 per cent. disablement pension from the Ministry of Pensions and National Insurance, or have a disablement equivalent to 100 per cent. As hon. Members on both sides of the Committee fully appreciate, Income Tax law recognises not merely the extent of a person's income, but his taxable capacity; that is, the unavoidable expenses which affect his ability to pay tax as compared with those who have not got such expenses.
For that reason we have marriage allowance, child allowance and several other forms of tax relief, but there are certain persons who suffer from disabilities o health so severely that they are subjected to a constant level of unavoidable expense which seriously impairs their ability to pay tax.
8.15 p.m.
I suggest that those persons are treated with scant justice under our present tax law. Of the expenses these unfortunate people suffer by illness of a diverse nature I shall not give details, but hon. Members can supply numerous examples and no doubt will do so, for we all know that paralysed, crippled and mutilated people require to wear special appliances. They need special means of conveyance and have to pay for special domestic help, appliances to enable them to eat or to look after themselves and


they require special clothing and sometimes special food. Blind persons require to pay for guides and also for Braille books and typewriters. All these things involve a heavy outlay of expenditure compared with that of the ordinary taxpayer.
At present, a special relief is given for a person who maintains a resident daughter on account of his infirmity, so the principle of helping a disabled person by x concession has been established, but it is obviously anomalous that a disabled person should receive help if he has a resident daughter, but not if he has to support a son or to find other means of paying for domestic help. He should receive the same treatment.
It seems to me that a very important aspect of this concession is that it would provide an increased incentive to a disabled person to work. Hon. Members know that there is a pleasurable psychological stimulation from earning money. That has a very encouraging effect on a person who is severely disabled, but that encouragement is greatly reduced if the effort he has to make to earn an income is absolutely disproportionate to what he eventually receives when taxation has been deducted.
This would be an incentive to a seriously disabled person to earn his living. I think it would prevent many disabled persons having to be dependent on the National Assistance Board or the National Health Service. Many of these people would keep themselves away from that form of charity through public funds if they had this increased incentive to work and earn their own living. Some time ago we had the benefit of the Report of the Royal Commission on Taxation of Profits and Incomes. I have no doubt that hon. Members have read paragraphs 201–207 in which this problem is dealt with very carefully.
I think it worth quoting the rather succinct words of paragraph 224 in which the Royal Commission said:
Grave incapacity (comparable to the 100 per cent. disability recognised in the administration of war pensions) should give rise to a claim for a tax allowance, which should be at least £100.
In other words, the Commission makes the recommendation contained in the new Clause. The Chancellor will no doubt tell us what the new Clause

would cost the Exchequer, but he will probably have to concede that the cost is very small compared with the beneficial effects it would have.
There are certain apparent arguments against the new Clause. The Chancellor is having a very busy time and I should like to save him some work by making some of the arguments against the Clause. The first is the difficulty of statutory definition. It can be argued that there is some difficulty in deciding who is 100 per cent. disabled if he does not already receive 100 per cent. disablement assessment from the Ministry of Pensions and National Insurance. We already have a satisfactory machinery for that—the machinery of the medical boards used by the Ministry of Pensions and National Insurance.
I cannot do better than again quote from the Royal Commission on the Taxation of Profits and Income, which states, in paragraph 203:
But we feel at the same time that the difficulty is not insuperable and ought to be faced. Machinery of the kind that we have in mind does, in fact, exist, though created for the purpose of war pensions administration; and some of the qualifications, e.g., blindness, do, as it were, prove themselves.
The difficulty of statutory definition is, therefore, comparatively small.
The Chancellor may also argue that certain disabled persons such as war pensioners and those receiving injury or blindness payments already receive supplementary tax-free grants. There is, clearly, a certain amount of inequity about allowing these people to receive tax-free grants as well as the relief offered by the new Clause. We on this side of the Committee have no objection if the Chancellor, with his extensive facilities, redrafts the Clause and brings it back on Report to ensure that the person who already receives a tax-free benefit may choose between receiving his tax-free benefit and accepting the help given him by the Clause.
It was argued in 1956 by the present Minister of Housing and Local Government, on the same new Clause, that it had the disadvantage that it tended to help persons with large incomes—in other words, people who had to pay tax and not people who, because of the paucity of their incomes, were not paying tax. We know that the Chancellor is a person of considerable


delicacy of sentiment, and I am sure that after the massive concessions which have been given to Surtax payers in the last few years by the Government he will not use that argument this evening.
Another argument is that the new Clause gives relief to the 100 per cent. disabled and not, for instance, to a person who is 90 per cent. disabled. I do not think that that can be seriously advanced, because in all Income Tax concessions one has to draw the line somewhere, and 100 per cent. disablement is a convenient point at which to draw the line. There are many persons who are disabled greatly in excess of 100 per cent. and if the figures were allowed to go so high one could call them 150 per cent. or 250 per cent. disabled. A figure of 100 per cent. is, therefore, a very convenient figure at which to draw the line for giving this concession. It has the obvious advantage of simplicity.
It can also be suggested that 100 per cent. disabled persons can be helped by the social services, but I ask hon. Members on both sides of the Committee to consider carefully what that means. What help do they, in fact, receive from the social services? They are entitled to medical treatment, but we are all entitled to that. They receive certain occasional benefits and help, but, in general, the amount of help which they receive from the social services is very small.
I therefore suggest that the arguments for this Clause are not easily refutable in terms of equity and justice. It seems economically logical, it is administratively feasible and it is politically desirable. While, in general, it is desirable for us to avoid an emotional approach to our problems in Committee, I hope that the Chancellor will not exclude from his mind the very proper sentiments of humanity and consideration for the afflicted which have always affected members of the Committee and have always received the most ready approbation of our constituents.

Mr. Percy Collick: I beg to second the Motion.
The Motion was very ably moved by my hon. Friend the Member for Loughborough (Mr. Cronin). As he rightly

said, the object of the Clause is to give an Income Tax concession to those Income Tax payers who are 100 per cent. disabled persons, irrespective of whether they were disabled in industry or in any other way. The test which it is intended to apply is that if they are 100 per cent. disabled persons they should have the Income Tax concession laid down in the Clause.
However carefully one goes through all the Amendments and new Clauses on the Finance Bill this year, in my view one can find no Amendment or new Clause as well warranted as this. It would be easy to argue the case for it merely on sentimental grounds. Anybody connected with organisations for disabled men or familiar with the day-to-day work which goes on among disabled people can quote case after case which would arouse quite easily the sentiments of the whole Committee behind the demands which this new Clause makes to the Government.
That, however, is not my intention in seconding the Motion. I think that the argument for the new Clause can stand solely on the basis of justice and equity. As my hon. Friend rightly pointed out, the basis of Income Tax law is not only that we have regard to what is a person's income, but that in assessing his liability to Income Tax we have regard to what are his expenses in obtaining that income. Unless that is done, obviously there is little fairness in Income Tax administration methods.
It does not require any imagination to understand the position of the 100 per cent. disabled person who is an Income Tax payer and who, by some miracle or another, has so mastered his disability that he is able to earn a livelihood in industry, in the professions or in some other occupation. I do not want to cite individual cases, though I could cite many.
8.30 p.m.
In earning his livelihood, what is the position of the 100 per cent. disabled person as compared with the able-bodied person? I know cases in my own division in Birkenhead where 100 per cent. disabled persons are paying no less than 10s. a day to be taken to and from their employment or profession. The Chancellor may say that under Income Tax


law as it now stands there is no allowance to any person for the expenses incurred in going to and from employment. I ask the Committee to contrast the expense which an able-bodied person has in going to and from employment with that which a 100 per cent. disabled person has. The disabled person cannot use public transport, such as buses. The very nature of his disability means that he must either hire a car or make an arrangement for the use of a hired car to take him to his employment.
In Birkenhead, it very often costs 100 per cent. disabled persons 10s. a day, but I know of cases in London—this can be supported; I will give the Chancellor details, if he wants them—where 100 per cent. disabled persons have to pay 10s. or 15s., and sometimes as much as £1, a day in order to be taken to and from their place of professional work or employment.
That is not the only extra expense of a disabled person. Anyone connected with disabled cases knows full well that, for the disabled person to retain even such degree of mobility as he may have, it means the setting up of all sorts of mechanical improvisations in the home. The organisations concerned primarily with this matter could tell the Chancellor of
cases which would show him the substantial charges which the individual has in these matters. It is not merely transport; it is not merely improvisation of means. Anyone living with a disabled person or
knowing anything about 100 per cent. disabled persons knows the extent of the expense. Very often attendance is necessary. Despite all these handicaps, the disabled person strives to carry on and to make his contribution in industry or in the professions. The number of persons who succeed in doing so is astonishing.
Has the Chancellor considered any more worthy case in this year's Budget than men and women such as those? Of course they have no lobby at Downing Street. Nobody goes to the Treasury to lobby the Chancellor of the Exchequer on behalf of these poor unfortunate persons. The Chancellor had quite enough Questions preceding the Budget to draw his attention to this matter. Particularly having regard to the Report of the Royal Commission on the Taxation of Profits

and Income to which my hon. Friend referred, one might reasonably have expected the Chancellor to do something about it.
The Royal Commission dealt with this matter in paragraphs 201 to 207 of its Report. It looked into this matter as closely as any body could possibly do. It spent months examining what should be done about this. Paragraph 202 says:
Our general conclusion is that grave disability ought to be the subject of allowance.
That is categorical enough. The Chancellor has had that recommendation before him for at least four years and, so far, has chosen to do nothing about it. It is nearly time that the House of Commons insisted that he did.
Having recommended that something should be done about these cases of 100 per cent. disability, the Report continues:
It presents itself to us as a personal circumstance that sets apart those who suffer from it and directly affects their relative capacity to pay.
The Report goes on:
What we are thinking of is a range of additional expense attendant upon the conduct of their normal life, not least upon the maintenance of their earning capacity, which yet goes unrelieved under the existing code.
If, after fully considering the whole subject, the Royal Commission came to that conclusion, what reason can the Government possibly have to justify their refusal to adopt the Commission's recommendation? In previous years we have discussed this matter to some extent, though not so fully as we ought to have done, and the time has now come when the Government must be pressed to make a decision, and a favourable decision. They ought to follow the lines of the recommendation of the Royal Commission.
We shall, of course, get a reply from the Treasury Bench tonight, but I have never yet heard from the Government any substantial explanation of why the Royal Commission's recommendation cannot be accepted. If the Government had the will, it could be accepted. We want to know whether the Government will heed the will of what I would have thought to be the whole Committee, irrespective of the side on which we sit. Unless the Government have some more substantial reply to give than we


have had in previous years, it seems that the only thing the disabled can do is to make themselves as powerful a lobby at the Treasury as some of the vested interests to which the Chancellor has been so willing to listen in this and previous Budgets.

Dr. King: It is a pleasure to follow my hon. Friend the Member for Birkenhead (Mr. Collick), whose eloquence we enjoy, and whose courage under physical adversity we admire tremendously. I support the case that he and my hon. Friend the Member for Loughborough (Mr. Cronin) have put up for the new Clause in respect of the 100 per cent. disabled, and I should also like to say a word in support of the new Clause relating to incapacitated children, and the other new Clause entitled "Relief for disabled persons." All three seek to give some reliefs for special kinds of disability.
In her latest book, "Social Science and Social Pathology", Baroness Wootton points out that we have not yet abolished real poverty; that, despite the Welfare State, certain misfortunes can take people below the poverty line. I suggest to the Chancellor that that is particularly true of the misfortune of 100 per cent. disability. Although disability pensions have been improved, they can never be big enough, and one might, therefore, ask the Chancellor to give a fiscal increase to the disability pensioner, and, in so doing, to make himself an ally of his right hon. Friend the Minister of Pensions and National Insurance, who has done some notable work in improving the lot of this class.
This evening, I would ask the Committee to look at the matter, not in that way but in the moral way that has been so feelingly put by my hon. Friend the Member for Birkenhead. Income does not mean the same thing to different people. A sum of £5 is less money to a disabled man than it is to an able-bodied man. The disabled man has to pay for so much that the able man can do for himself. The disabled man needs so many little things that the able man can do without. The disabled man very often needs special food, special appliances, all of which cost money. To give two people the same income, when one is 100 per cent. disabled and the other is 100 per cent. able, is to treat them differently.
That is the moral case, and it is the moral case for which we have the utter and complete backing of the Royal Commission. I would say that, apart from bereavement, the most distressing inheritance of the past wars is the man who has been disabled; who lost everything except his life to keep this a free country. The new Clause would ease his financial burden, and would show these sad heroes of the Second World War that Parliament always has their sacrifices in mind. What I have said about the 100 per cent. war-disabled veterans is also true of those disabled 100 per cent. by disease, or by accident in modern industry. I, therefore, hope that the Chancellor will accept the first of this group of new Clauses.
The next new Clause would give a tax concession to the parents of incapacitated children. In a recent debate in another place, very moving references were made to the parents of children born incapacitated in some way. In recent Finance Bills and pensions Acts we have improved, to some extent, the lot of the parent of the incapacitated child, but not yet, by any means, have we done enough for the father or mother of a disabled child.
Some of the mothers and fathers devote almost the whole of their lives to children who remain children for ever. I know of someone in my own town whose child of 23 has the mind of a child of perhaps 6 or 7. These children who never grow up always need care and supervision. There is not enough room for them all in the special institutions we have set up. Although we are steadily increasing the number of these schools, each of the existing ones has a huge waiting list. As a result, some of the children, who are children at the age of 18, 19 or 20, never get a chance to get into a special school, even if the parents want them to.
8.45 p.m.
Moreover, some parents do not wish to send their incapacitated child away from home, and other children are so incapacitated as to be beyond benefiting even from any of the fine places that we are setting up.
The parent of a child over the age of
16 who is bright and brainy and makes his way to college or university is helped
by the Treasury. The child is not a wage


earner and is a liability and certain tax reliefs are given for him. Even if the child stays on after the age of 16 and goes to a special school the Treasury helps him. This was a concession which we managed to secure in previous years. It is worth remarking that, through no fault of their own, the best parents in the world may have incapacitated or defective children. That is no slur on parenthood. It is merely a misfortune of nature if a parent still has to maintain, nurse and care for a child of 18 with the brain of a child of 8, or has to look after a spastic youth or young maiden, for whom there is no Income Tax relief.
Between the ages of 16 and 21 when the unfortunate child becomes an adult there is a gap which I would ask the Chancellor of the Exchequer to see if he can fill in some way to ameliorate the financial burden that is borne by the parent of such a child. I hope that the Chancellor will look very favourably on the Clause—"Incapacitated child over the age of sixteen years." The new Clause—"Relief for disabled persons"—tackles yet another aspect of disability; it seeks to equate the burden of incapacity to earn one's living with the burden of being old. As hon. Members will know, Her Majesty's present Government have begun to treat specially for Income Tax purposes people over the age of 65. This is part of what I referred to in an earlier debate—this tailoring of tax to the kind of person who is being taxed.
We suggest that there is a moral case for applying this special treatment which we give to people at the age of 65 to those people who are not yet 65 but have lost the capacity to earn their own living. Age and bodily infirmity make money less valuable. They make demands which younger and able-bodied people are not called upon to meet.
It is in that spirit that I address myself to these three Clauses. I echo the words of my hon. Friend the Member for Birkenhead, and suggest to the Chancellor that these new Clauses, whatever they may cost, are about the most worthwhile, humane Clauses that he can concede in the long debates on this Bill. I know that the Chancellor is a humane man and I ask him to address himself seriously to this problem and to con-

sider how far he can go in conceding what we are asking for.

8.45 p.m.

Mrs. Harriet Slater: I wish to add my plea to that of my hon. Friend the Member for Southampton, Itchen (Dr. King) on this human problem. When my hon. Friend was speaking I was thinking of a girl who lives in Stoke-on-Trent. Her mother went out to work, as well as her father, who did a heavy job, because the child was born a spastic. She could not walk properly and her sight was sadly impaired, though her mental capacity was very good. Wherever the child went she had to be taken by someone—first, to school and later to a typing school. Her mother and father spent many hours not only working hard, but worrying on her behalf.
That girl, through courage, patience, endurance and persistence, has become a very efficient typist and is holding a job in one of our council departments. Had her mother and father not been able to go out to work, that girl would have been a grave liability not only to the local authority, but to the country as a whole. Transport charges have been incurred in getting this girl to the typing school, and even now she has to be accompanied when she goes by public transport. She has incurred additional expense for special boots, spectacles and clothes because of her physical limitations.
What has been this girl's great contribution? She has been able to earn a living in her own right, and that has not only a social and economic value but a psychological value as well. Her parents could have gone through life, having given up hope, saying, "We do not know why this has happened and why we should suffer. We will do nothing about it. We hope the State will make all the necessary provisions." If those parents were working today and the girl were a small child, they would be called upon to pay Income Tax. Yet they would be suffering this great inequality, for it is an inequality which is borne by people like that.
There is another reason why we should accept the new Clause. Why do local authorities, like that in my own city, take a great deal of trouble to establish very efficient workshops for the blind?
Why have we set up our welfare department for handicapped people? Why are we taking great trouble, through the Government, to try to do something about factories such as Remploy? In the first place, of course, we want to see these people working and making a contribution to the country's economy but, more than that, we want to give them a lift in the psychological sense, and make up for all their disabilities. When local authorities and the Government themselves are trying to provide facilities for these people, at least we should encourage them when they are able to earn their own living by giving this extra allowance. We should encourage the parents of children who are in the sort of position I have described.
Something has been said already about the extra clothes, additional pairs of boots, and so forth, which are required by people with various disabilities. It is sometimes necessary even to alter the doors in their homes, and there is extra wear and tear on the walls and decorations because of the wheeling in and out of chairs and the consequent damage to walls and furniture. Special surgical appliances are needed. Above all, such people need extra nourishment and special foods. They need extra medical care, also. These are all added liabilities which they have to suffer.
The Chancellor has very many things to consider, but we ask him to look at this particular problem again, realising that these people ought not to be penalised further when they are already heavily penalised by the disabilities which they suffer.

Mr. T. Brown: I support the new Clause. My hon. Friend the Member for Stoke-on-Trent, North (Mrs. Slater) has reminded the Committee that, when persons are disabled as a result of war injuries or accidents sustained in heavy industries, their expenditure is increased because of the extra things they have to buy. As I have said many times, I always speak in support of the men who work in heavy industry, particularly the miners. We have today about 530 paraplegics in this country, and their interests, too, are involved in the new Clause.
I do not say that the Chancellor will turn the new Clause down He is sympathetic, and the hon. and learned

Gentleman the Financial Secretary, too, is sympathetic towards this type of case. We are not asking that the Chancellor should forfeit £6 million or £7 million as we did on a previous new Clause, but we ask him to give a concession to those disabled in war or in their occupations. We must always remember that they have to bear extra expenditure.
The Chancellor is very sympathetically inclined to our argument, and he may say that this is a matter for people to put to the Inland Revenue authorities. However, while he may be sympathetic, we find that, when we approach the Income Tax people with a view to obtaining a small concession or, so to speak, putting a little elastic into the requirements of the Revenue, we find that they are very half-hearted. I do not say that with any disrespect, but if he includes this Clause in the Finance Bill it will help considerably to alleviate the very great hardship which these men have experienced over a number of years.
If there are two sections of the community which warrant our sympathy—not expressed in words, but in deeds—they are the war disabled and those who, unfortunately, have met with serious accidents in the pits, steel industry and foundries. Surely the Chancellor can accept this Clause. It will not upset or unbalance the Budget. It will simply prove to these people, who have experienced misfortune in several walks of life, that the Chancellor is sympathetically inclined towards them. We have a saying in Lancashire which I have mentioned once or twice here. It is, "Sympathy without relief is like mustard without beef". In other words, it is very sharp.

Mr. Ellis Smith: The Chancellor remembers what my hon. Friend said once before.

Mr. Brown: The Chancellor rightly took me to task, but that does not matter. I am not one of those supersensitive people who criticise a man for taking him to task, but the right hon. Gentleman missed the point when he told me that I was wrong in accusing him of being skinny.

Mr. Ellis Smith: That was the word.

Mr. Brown: That was the word that I used. It is true that we were discussing the provisions of Clause 12, but I had better not develop that point or you, Sir Charles, will rule me out of order.
The reason we have tabled this new Clause for the consideration of the Chancellor and for his Department is this. Instead of telling these people, "We have every sympathy with you in your misfortune. We do not like to be hard-hearted. We would like to help in every conceivable way", let the right hon. Gentleman apply the sympathetic spirit towards these unfortunate people and accept this Clause. He knows full well that it will not upset the balance of the Bill.

Mr. Amory: I hate having to recommend the Committee to resist these Clauses because none of us can fail to feel sympathy with the unfortunate men and women who are the subject of the Clause moved by the hon. Member for Loughborough (Mr. Cronin) who, we all recognise, speaks with particular knowledge of this subject.
I should like to join in the tribute paid by the hon. Member for Southampton, Itchen (Dr. King) to the courage that we all know is displayed by the hon. Member for Birkenhead (Mr. Collick) in meeting his physical disabilities. The people in question, by definition, are unable to lead a full and normal life and many of them are subject constantly to varying degrees of physical distress. Governments of all parties have for long recognised an obligation to help the disabled, and I think that they have fulfilled that obligation.
When I was Minister of Pensions—which, I should like to say, in passing, was an office which I not only enjoyed holding very much but felt was one of the most worth while offices to hold I learned something of the problems of the disabled. However, we must give our help in such a way as to bring the greatest benefit to those who need it most. I very much doubt whether the proposal in the Clause would do that. The two reasons why I must reluctantly resist the Clause are, first, that I do not believe this is the best way of giving the help where it is most needed, and secondly, that it would be opening a door which would become wider and wider and that if we once started on this

principle I do not know where we would stop.
9.0 p.m.
I can deal with the arguments briefly, because a similar proposal was debated fairly fully last year and in 1954 and 1956. On 2nd July last year my hon. and learned Friend the Financial Secretary explained clearly the difficulties that we see in accepting this proposal. The reasons which he gave then still seem to us to hold good.
If I may remind the Committee briefly of those reasons, the main and fundamental one is that in our view it is impossible for the Income Tax to take into account as closely as this proposal implies the personal circumstances and disabilities of the individual taxpayer concerned. Help for the disabled by way of tax remission would inevitably be a good deal a matter of hit and miss. It would give help, undoubtedly, to many who needed it, but it would miss a great many of those who need help and it would benefit some who do not.
The proposed allowances would, for instance, give no help to those whose incomes are so low that they pay no Income Tax, while it would give a sizeable benefit to incapacitated persons with substantial income who pay tax at the higher rates. Indeed, there seems to be some inconsistency between the tenor of the criticisms by hon. Members opposite of the Income Tax proposals in general in the Bill and their suggestion in the Clause for giving relief in this way.

Mr. Collick: I cannot square the right hon. Gentleman's argument. In his own Income Tax arrangements this year in the Bill he leaves out of account altogether those who do not pay Income Tax, but he has given substantial Income Tax reliefs to those who are very well off. Therefore, why does he say that the Clause cannot be applied to disabled persons because it would give something to people who are well off and nothing to those who are less well off? That is exactly what this year's Income Tax arrangements do.

Mr. Amory: I am not saying that it cannot be done. What I am saying is that the assistance that can be provided from public funds for the benefit of the disabled could be channelled to the


disabled in better ways than is proposed under these Clauses.
It has been suggested that an Income Tax allowance of the kind proposed is a good way of taking account of the extra expenses which disabled people must incur. I do not deny that most disabled people incur additional expenses. That again, however, points to some of the difficulties and anomalies which adoption of this proposal would involve. The Clause proposes relief for the 100 per cent. disabled. It does not try to take account of the particular extra expenses that a 100 per cent. disabled man or woman would incur. It is difficult to assess the extra expenses that would be incurred in terms of a particular degree of disability.
When one considers individual cases, it will he found that the additional expenses incurred would vary very much indeed between one 100 per cent. disabled person and another. It will also be found that the extra expenses incurred would often be more in the case of somebody with, say, a 75 or 90 per cent. disability than in the case of many of those with 100 per cent. disability. It would be virtually impossible administratively to take cognisance of those differences or probably to go any further than the 100 per cent. disablement register. It would be most unsatisfactory to stop at that point. We would be driven, in fact, to try to go further, and there is where the difficulties would start, because any assumption of equivalence would involve medical investigation and that would be something quite impossible for the tax authorities to undertake.

Mr. Ellis Smith: So this is a case in support of increased benefits as soon as possible.

Mr. Amory: That is another matter that does not arise on the new Clause, as the hon. Member knows.
Several hon. Members referred to the recommendation of the Royal Commission on the Taxation of Profits and Income. There were two important provisos in that case. The recommendation was in favour of an allowance in 100 per cent. disablement, but that carried the rider that such an allowance should not be in addition to, or in parallel with, any tax-free disablement benefit, and also

that if it were given certain other current allowances should be withdrawn. In general, if that recommendation were followed it would seem to me that it would carry no advantage to the war disabled or to those in receipt of industrial injury benefit, because those tax-free benefits would be greater, even in the case of somebody with a high income, than the benefits recommended under the Clause. Therefore, if the Royal Commission recommendation were accepted literally it would frustrate the objects of the Clause.
It is the Government's view, for these reasons, that fiscal proposals of this kind are not the best way to help the disabled, and that the best way is to direct help specifically to the individual, taking account of his individual disability, circumstances and needs. That is what we have done in recent years, and, as hon. Members know, we keep the services provided under constant review with a view to improving them whenever that seems justified and desirable.
There is, for example, extensive provision under the National Health Service for special services for the disabled—such things as the provision of invalid tricycles, artificial limbs and domestic help, to give only a few instances. Then the Ministry of Labour provides invaluable assistance in the way of rehabilitation and vocational training. I think that these are the best ways of all to help the disabled. In addition there are tax-free pensions with supplements for disabled members of the Armed Forces and persons disabled in industry.
The hon. Member for Itchen referred to the problem of incapacitated children over 16 years of age. I think that he was referring to the position that arises where the children's allowances are no longer payable. I am sure he will realise that there are grants available through the National Assistance Board to young people over the age of 16 whose means are assessed independently of the means of their parents. So a grant would be payable to young people of that kind if they are incapacitated, without regard in general to the means of the parents. This helps to deal with the situation about which the hon. Gentleman is particularly worried, where the children's allowance is stopped at the age of 16 or later, if and when education starts.

Dr. King: I am grateful to the right hon. Gentleman for giving way. Would he deal with this point by way of question and answer? In this proposed Clause we want to compare like with like. The father who has an able child who goes to a university gets an Income Tax concession. That child may get a university scholarship. We want to put exactly on all fours, from the point of view of Income Tax, the father who has a child who is a complete liability. I admit the point about National Assistance. It is one of the improvements we have made in recent years.

Mr. Amory: If the hon. Gentleman thinks about this I think he will see a difficulty that would arise if what he is suggesting were done. If such an allowance were made for an incapacitated child between the age of 16 and 21, why should it stop at the age of 21 particularly? Again, it would be extremely difficult to draw a line there, and we would find ourselves led on into a wider and wider field.
It is really for those two main reasons that we feel, to start with, that this is not the most satisfactory way of helping the disabled. If there is more help due
to the disabled, that is another question. If we once accepted this principle we should be led into a wider and wider field and find it more and more difficult to draw any acceptable lines or to know where to stop. As I say, it is with very deep regret, and after a great deal of thought, that I have come to the conclusion that I cannot recommend the Committee to accept the Clause, much as I should like to do so.

Mr. T. Brown: Before the right hon. Gentleman leaves that point, he referred to two branches of Ministries which were always prepared to help people who are disabled or incapacitated. If he will consider carefully, I think he will find that there are many cases of people who cannot get help from either the Ministry of Labour or the National Assistance Board or even under the Industrial Injuries Acts, because their case was in existence before those schemes came into operation.
May I give an illustration of what I mean, Sir Charles? Looking at me you would not think I had been disabled, but I have to wear a surgical belt. When I first bought a belt on the recommenda-

tion of the doctor, I paid £5 5s. for it. I have renewed it two or three times. I have renewed it again today and the price I paid today for that surgical belt to sustain me physically was £16 9s. That is a high price if it has to be paid by an injured workman. Therefore, I say that if the Chancellor would consider this carefully he would find that it does not apply to all cases. It is true that Government schemes help some people, but not all people, and we want to help all cases by introducing this Clause into the Finance Act.

Mr. Amory: What the hon. Gentleman has said illustrates the extreme difficulty of this suggestion. One starts by dealing with one specific case and then realises that the next case is substantially as hard, and one gets led on again. It is extremely difficult to deal through Income Tax with that problem. Wherever we stop we shall be faced with a very unsatisfactory position. I cannot give any assurance that I can see my way to doing anything now, but I will think about the arguments that have been adduced and I will keep this problem very much in my mind. I cannot see any hope of doing anything in the Bill this year that I would find satisfactory, for the reasons I have given. I recognise the problem, however, and if I should ever be convinced to the contrary and find that it would be a good thing to do it through Income Tax, no one would be more ready to do it than I.

9.15 p.m.

Mr. Douglas Jay: I found the Chancellor's reply very disappointing and unconvincing. He did exactly what my hon. Friend the Member for Ince (Mr. T. Brown) feared he would do—he gave sympathy without help. He did not do full justice to the persuasive and eloquent arguments of three or four of my hon. Friends, including my hon. Friend the Member for Birkenhead (Mr. Collick) and my hon. Friend the Member for Ince, who are themselves living examples of some of the arguments which they put forward. The Chancellor seemed to be trying to find difficulties to put in the way of our proposals.
On the new Clause relating to 100 per
cent. disablement he said that the method which we proposed would not provide precisely the proportionate


amount of relief which was appropriate for the need in each case. My hon. Friends did not argue that this was necessarily an absolutely ideal and perfect way of meeting that need, but they said that it would give a great deal of relief where a great deal of relief was needed.
The Chancellor did not do justice to the basic argument of the Royal Commission on the Taxation of Profits and Income, that to earn a living, as many of them succeed in doing, disabled persons necessarily incur expenses which the rest of us do not have to incur. The case of the blind was mentioned. I was rather struck by the fact that at Question Time two days ago, when some of my hon. Friends pressed that relief should be given for guide dogs for the blind by way of expenses, the Chancellor then explained that under the rules governing expenses that was impracticable. We now propose a different way, by means of personal allowances, and he says that that, too, is not the right way.
This is not a proposal brought forward by hon. Members who are moved by the human problems and by the relief which they have known from their own experience. This is a proposal of the Royal Commission. I put it to the Chancellor that the Royal Commission considered all the arguments about alternative ways of doing it and took into account the relief which is given by social services and in other ways. The Royal Commission was fully conscious of the argument, as we all are, and which we always get from Chancellors—" If you do this, you open the door to all sorts of other things."
In spite of that, the Royal Commission said that grave disability ought to be the subject of an allowance, and it called the present relief anomalous and limited. The Chancellor also said that this would be an impossible way, because it was not the business of the Inland Revenue to define hardship and, in terms of distress to define the difference between one case and another. We had that argument about post-war credits, but the Inland Revenue is now to do almost exactly what the Chancellor declared to be impossible. If he succeeded in that instance, by using a number of special definitions, I am not

convinced that it cannot be done in this case.
The Chancellor's most extraordinary argument was that if he gave tax reliefs to disabled people in this way, more relief would go to those with the largest incomes. That comes very strangely from a Chancellor who has just made Budget concessions of £400 million almost entirely on the principle that the higher the income, the greater the relief. When he comes to this special category of people who are in distress he says that that is the wrong way to do it and that he is not prepared to offer any concession.
I could not help reflecting, when he said that, that the cost of what we are proposing—and he did not tell us and I do not know whether he would care to make an estimate—must be infinitesimal compared with the total reliefs, even the total Income Tax reliefs, given in the Budget.
In spite of what the Chancellor said about National Assistance in the case of the incapacitated child over 16, as the Royal Commission pointed out, the fact remains that there is this anomalous gap which causes needless hardship between the ages of 16 and 21. There is an inequity between the particular incapacitated child before the age of 16 and after, and also, as my hon. Friend pointed out, between a child of 18 or 19 who is incapacitated and not able to go to university and does not get an allowance, and a child of the same age who goes to university or some other full-time education and gets the full allowance.
The Chancellor said that there was no reason why the allowance should stop at the age of 21 if it went on from 16 to 21. The Royal Commission answered that. It pointed out that after the age of 21 it was open to the parent to make arrangements that do not apply below the age of 21, by covenants, and so on, to get relief for the child, so I was not very convinced by that argument either.
I think that the only argument that the Chancellor advanced which had any persuasive effect on my hon. Friends was when he came near to saying that there was a case for a relief but that it should be done not through Income Tax but by some increase, which he did not specify, in social service benefits. When


he was asked what they were going to be and when they would be introduced, he said that this was not the occasion to go into further details.
If the Chancellor would like to give us a firm assurance tonight that he has proposals in mind to cover this in some other way and that they will be introduced without any substantial delay, I think my hon. Friends might be pre-

pared to withdraw these Clauses. Unless the Chancellor is prepared to do that, for the reasons that my hon. Friends gave and to encourage the Chancellor not to make this sort of reply again, I hope that my hon. Friends will press these new Clauses to a Division.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 128, Noes 179.

Division No. 130.]
AYES
[9.23 p.m.


Allen, scholefield (Crewe)
Howell, Charles (Perry Barr)
Parker, J.


Beswick, Frank
Hughes, Emrys (S. Ayrshire)
Plummer, Sir Leslie


Blackburn, F.
Hughes, Hector (Aberdeen, N.)
Popplewell, E.


Blenkinsop, A.
Hunter, A. E.
Prentice, R. E.


Bottomley, Rt. Hon. A. G.
Hynd, H. (Accrington)
Price, Philips (Gloucestershire, w.)


Bowden, H. W. (Leicester, S.W.)
Irvine, A. J. (Edge Hill)
Pursey, Cmdr. H.


Brockway, A. F.
Isaacs, Rt. Hon. G. A.
Redhead, E. C.


Brown, Thomas (Ince)
Jay, Rt. Hon. D. P. T.
Reynolds, G. W.


Burke, W. A.
Jeger, George (Goole)
Rhodes, H,


Butler, Mrs. Joyce (Wood Green)
Jenkins, Roy (Stechford)
Rogers, George (Kensington, N.)


Champion, A. J.
Johnson, James (Rugby)
Ross, William


Clunie, J.
Jones, David (The Hartlepools)
Royle, C.


Collick, P. H. (Birkenhead)
Jones, J. Idwal (Wrexham)
Silverman, Sydney (Nelson)


Cronin, J. D.
Jones, T. w. (Merioneth)
Skeffington, A. M.


Crossman, R. H. S.
Kenyon, C.
Slater, Mrs. H. (Stoke, N.)


Darling, George (Hillsborough)
Key, Rt. Hon. C. W.
Smith, Ellis (Stoke, S.)


Davies, Ernest (Enfield, E.)
King, Dr. H. M.
Sorensen, R. W.


Deer, G.
Lawson, G. M.
Soskice, Rt. Hon. Sir Frank


de Freitas, Geoffrey
Lee, Miss Jennie (Cannock)
Sparks, J. A.


Diamond, John
Lever, Leslie (Ardwick)
Spriggs, Leslie


Dodds, N. N.
Lindgren, G. S.
Steele, T.


Ede, Rt. Hon. J. C.
McAlister, Mrs. Mary
Stewart, Michael (Fulham)


Edwards, Robert (Bilston)
McCann, J.
Stonehouse, John


Fletcher, Eric
MacColl, J. E.
Strachey, Rt. Hon. J.


Forman, J. C.
MacDermot, Niall
Stross,Dr.Barnett(Stoke-on-Trent,C.)


Fraser, Thomas (Hamilton)
Mclnnes, J.
Taylor, John (West Lothian)


Gibson, C. W.
McKay, John (Waltsend)
Thomson, George (Dundee, E.)


Gordon Walker, Rt. Hon. P. C.
McLeavy, Frank
Thornton, E.


Greenwood, Anthony
MacPherson, Malcolm (Stirling)
Ungoed-Thomas, Sir Lynn


Grey, C. F.
Mallalieu, E. L. (Brigg)
Viant, S. P.


Griffiths, David (Rother Valley)
Mallalieu, J. P. W. (Huddersfd, E.)
Warbey, W. N.


Griffiths, William (Exchange)
Mellish, R. J.
Weitzman, D.


Hall, Rt. Hn. Glenvil (Colne Valley)
Mitchison, G. R.
Wells, William (Walsall, N.)


Hamilton, W. W.
Moody, A. S.
Wheeldon, W. E.


Hannan, W.
Morrson,Rt.Hn.Herbert(Lewis'm,S.)
White, Mrs. Eirene (E. Flint)


Hastings, S.
Moyle, A.
White, Henry (Derbyshire, N.E.)


Hayman, F. H.
Mulley, F. W.
Williams, Rt. Hon. T. (Don Valley)


Healey, Denis
Neal, Harold (Bolsover)
Williams, W. R. (Openshaw)


Henderson, Rt. Hn. A. (Rwly Regis)
Noel-Baker, Francis (Swindon)
Willis, Eustace (Edinburgh, E.)


Herbison, Miss M.
Oliver, G. H.
Wilson, Rt. Hon. Harold (Huyton)


Hilton, A. V.
Oram, A. E.



Hobson, C. R. (Keighley)
Owen, W. J.
TELLERS FOR THE AYES:


Holmes, Horace
Padley, W. E.
Mr. Pearson and Mr. J. T. Price.


Houghton, Douglas
Pannell, Charles (Leeds, W.)





NOES


Agnew, Sir Peter
Bell, Ronald (Bucks, S.)
Chichester-Clark, R.


Aitken, W. T.
Bevins, J. R. (Toxteth)
Clarke, Brig. Terence (Portsmth, W.)


Alport, C. J. M.
Bidgood, J. C.
Conant, Maj. Sir Roger


Amery, Julian (Preston, N.)
Biggs-Davison, J. A.
Cooper, A. E.


Amory, Rt. Hn. Heathcoat (Tlverton)
Bingtiam, R. M.
Cordeaux Lt.-Col. J. K.


Anstruther-Gray, Major Sir William
Bishop, F, P.
Corfield, F. V.


Arbuthnot, John
Black, Sir Cyril
Craddock, Beresford (Spelthorne)


Armstrong, C. W.
Body, R. F.
Crowder, Sir John (Finchley)


Ashton, H.
Bonham Carter, Mark
Cunningham, Knox


Atkins, H. E.
Bowen, E. R. (Cardigan)
Currie, G. B. H.


Baldwin, Sir Archer
Boyd-Carpenter, Rt. Hon. J. A.
Dance, J. C. G.


Balniel, Lord
Boyle, Sir Edward
D'Avigdor-Goldsmid, Sir Henry


Barber, Anthony
Brewis, John
Deedes, W. F.


Barlow, Sir John
Brooman-White, R. C.
Dodds-Parker, A. D.


Barter, John
Burden, F. F. A.
Doughty, C. J. A.


Batsford, Brian
Butler,Rt.Hn.R.A. (Saffron Walden)
Dugdale, Rt. Hn. Sir T. (Richmond)


Baxter, Sir Beverley
Carr, Robert
Duncan, Sir James


Bell, Philip (Bolton, E.)
Cary, Sir Robert
Eden, J. B. (Bournemouth, West)




Erroll, F. J.
Johnson, Dr. Donald (Carlisle)
Pott, H. P.


Finlay, Graema
Johnson, Eric (Blackley)
Powell, J. Enoch


Fisher, Nigel
Jones, Rt. Hon. Aubrey (Hall Green)
Price, David (Eastleigh)


Fletcher-Cooke, C.
Ken, Sir Hamilton
Prior-Palmer, Brig. O. L.


Gammans, Lady
Lambton, Viscount
Redmayne, M.


Garner-Evans, E. H.
Leather, E. H. C.
Rees-Davies, W. R.


Glover, D.
Leburn, W. G.
Remnant, Hon. P.


Glyn, Col. Richard H.
Legh, Hon. Peter (Petersfield)
Ridsdale, J. E.


Godber, J. B.
Lindsay, Martin (Solihuil)
Roper, Sir Harold


Graham, Sir Fergus
Linstead, Sir H. N.
Ropner, Col. Sir Leonard


Grant-Ferris, Wg Cdr. H. (Nantwich)
Lloyd, Maj. Sir Guy (Renfrew, E.)
Russell, R. S.


Green, A.
Longden, Gilbert
Sharples, R. C.


Gresham Cooke, R.
Loveys, Walter H.
Shepherd, William


Grimond, J.
Lucas, Sir Jocelyn (Portsmouth, S.)
Simon, J.E. S. (Middlesbrough, W.)


Grimston, Hon. John (St. Albans)
Lucas-Tooth, Sir Hugh
Smithers, Peter (Winchester)


Grosvenor, Lt.-Col. R. G.
Macdonald, Sir Peter
Spearman, Sir Alexander


Gurden, Harold
McLaughlin, Mrs. P.
Stanley, Capt. Hon. Richard


Harris, Frederic (Croydon, N.W.)
McLean, Neil (Inverness)
Stevens, Geoffrey


Harris, Reader (Heston)
McMaster, Stanley
Steward, Sir William (Woolwich, W.)


Harrison, Col. J. H. (Eye)
Macpherson, Niall (Dumfries)
Stuart, Rt. Hon. James (Moray)


Heald, Rt. Hon. Sir Lionel
Maddan, Martin
Studholme, Sir Henry


Heath, Rt. Hon. E. R. G.
Maitland, Hon. Patrick (Lanark)
Summers, Sir Spencer


Henderson-Stewart, Sir James
Manningham-Buller, Rt. Hn. Sir R.
Taylor, Sir Charles (Eastbourne)


Hesketh, R. F.
Marlowe, A. A. H.
Teeling, W.


Hicks-Beach, MaJ. W. W.
Marshall, Douglas
Thornton Kemsley, Sir Colin


Hill, John (S. Norfolk)
Mathew, R.
Tiley, A. (Bradford, W.)


Hinchingbrooke, Viscount
Maudling, Rt. Hon. R.
Turton, Rt. Hon. R. H.


Hirst, Geoffrey
Manny, R. L.
Vickers, Miss Joan


Hobson, John(Warwick &amp; Leam'gt'n)
Maydon, Lt.-Comdr, S. L. C.
Wade, D. W.


Holland-Martin, C. J.
Medlicott, Sir Frank
Wakefield, Edward (Derbyshire, W.)


Holt, A. F.
Nabarro, C. D. N.
Wall, Patrick


Hornby, R. P.
Nairn, D. L. S.
Ward, Rt. Hon. G. R. (Worcester)


Hornsby-Smith, Miss M. P.
Neave, Airey
Ward, Dame Irene (Tynemouth)


Howard, Gerald (Cambridgeshire)
Nicolson, N. (B'n'm'th, E. &amp; Chr'oh)
Webbe, Sir H.


Howard, John (Test)
Noble, Michael (Argyll)
Webster, David


Hughes Hallett, Vice-Admiral J.
O'Neill, Hn. Phelim (Co. Antrim, N.)
Williams, Paul (Sunderland, S.)


Hughes-Young, M. H. C.
Osborne, C.
Williams, R. Dudley (Exeter)


Hulbert, Sir Norman
Page, R. G.
Wills, Sir Gerald (Bridgwater)


Hutchison, Michael Clark(E'b'gh,S.)
Pannell, N. A. (Kirkdale)
Wilson, Geoffrey (Truro)


Hyde, Montgomery
Partridge, E.



Hylton-Foster, Rt. Hon. Sir Harry
Pickthorn, Sir Kenneth
TELLERS FOR THE NOES:


Irvine, Bryant Godman (Rye)
Pilkington, Capt R. A.
Mr. Bryan and Mr. Whitelaw


Jenkins, Robert (Dulwich)
Pitman, I. J.

New Clause—(INCAPACITATED CHILD OVER THE AGE OF SIXTEEN YEARS.)

In subsection (1) of section two hundred and twelve of the Income Tax Act. 1952 (which relates to relief for children), after the words "if over the age of sixteen years at the commencement of that year, is receiving full-time instruction at any university, college, school or other educational establishment", there shall he inserted the words "or who, being over the age of sixteen years, but has not attained the age of twenty-one years at the commencement

of that year is incapacitated by illness, infirmity or disablement from undergoing full-time instruction at any school or other educational establishment or from following any gainful occupation ".—[Mr. Houghton.]

Brought up, and read the First time.

Motion made, and Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 127, Noes 179.

Division No. 131.]
AYES
[9.32 p.m.


Allen, Scholefield (Crewe)
Fletcher, Erio
Hughes, Hector (Aberdeen, N.)


Beswick, Frank
Forman, J. C.
Hunter, A. E.


Blackburn, F.
Fraser, Thomas (Hamilton)
Hynd, H. (Accrington)


Blenkinsop, A.
Gibson, C. W.
Irvine, A. J. (Edge Hill)


Bottomley, Rt. Hon. A. G.
Cordon Walker, Rt. Hon. P. C.
Isaacs, Rt. Hon. G. A.


Bowden, H. W. (Leicester, S.W.)
Greenwood, Anthony
Jay, Rt. Hon. D. P. T.


Brockway, A. F.
Grey, C. F.
Jeger, George (Code)


Brown, Thomas (Inoe)
Griffiths, David (Rother Valley)
Jenkins, Roy (Stechford)


Burke, W. A.
Griffiths, William (Exchange)
Johnson, James (Rugby)


Butler, Mrs. Joyce (Wood Green)
Hall, Rt. Hn. Glenvil (Colne Valley)
Jones, David (The Hartlepools)


Champion, A, J.
Hamilton, W. W.
Jones, J. Idwal (Wrexham)


Clunie, J.
Hannan, W.
Jones, T. W. (Merioneth)


Collick, P. H. (Birkenhead)
Hastings, S.
Kenyon, C.


Cronin, J. D.
Hayman, F. H.
Key, Rt. Hon. C. W.


Crossman, R. H. S.
Healey, Denis
King, Dr. H. M.


Darling, George (Hillsborough)
Henderson, Rt. Hn. A. (Rwly Regis)
Lawson, G. M.


Davies, Ernest (Enfield, E.)
Herbison, Miss M.
Lee, Miss Jennie (Cannock)


Deer, C.
Hilton, A. V.
Lever, Leslie (Ardwick)


de Freitas, Geoffrey
Hobson, C. R. (Keighley)
Lindgren, G. S.


Diamond, John
Holmes, Horace
McAlister, Mrs. Mary


Dodds, N. N.
Houghton, Douglas
McCann, J.


Ede, Rt. Hon. J. C.
Howell, Charles (Perry Barr)
MacColl, J. E.


Edwards, Robert (Bilston)
Hughes, Emrys (S. Ayrshire)
MacDermot, Niall




McInnes, J.
Plummer, Sir Leslie
Stewart, Michael (Fulham)


McKay, John (Wallsand)
Popplewell, E.
Stonehouse, John


McLeavy, Frank
Prentice, F. E.
Stross,Dr.Barnett(Stoke-on-Trent,C.)


MacPherson, Macolm (Stirling)
Price, Philips (Gloucestershire, W.)
Taylor, John (West Lothian)


Mallalieu, E. L. (Brigg)
Pursey, Cmdr. H.
Thomson, George (Dundee, E.)


Mallalieu, J. P. W. (Huddersfd, E.)
Redhead, E. C.
Thornton, E.


Mellish, F. J.
Reynolds, G. W.
Ungoed-Thomas, Sir Lynn


Mitchlson, G. R.
Rhodes, H
Viant, S. P.


Moody, F. S.
Rogers, George (Kensington, N.)
Warbey, W. N.


Morrison,Rt.Hn.Herbert(Lewis'm,S.)
Ross, William
Weitzman, D.


Moyle, A.
Royle, C.
Wells, William (Walsall, N.)


Mulley, F. W.
Silverman, Sydney (Nelson)
Wheeldon, W. E.


Neal, Harold (Bolsorer)
Skeffington, A. M.
White, Mrs. Eirene (E. Flint)


Noel-Baker, Francis (Swindon)
Slater, Mrs. H. (Stoke, N.)
White, Henry (Derbyshire, N.E.)


Oliver, G. H.
Smith, Ellis (Stoke, S.)
Williams, Rt. Hon. T. (Don Valley)


Oram, A. E.
Sorensen, R. W.
Williams, W. R. (Openshaw)


Owen, W. J.
Soskice, Rt. Hon, Sir Frank
Willis, Eustace (Edinburgh, E.)


Padley, W. E.
Sparks, J. A.
Wilson, Rt. Hon. Harold (Huyton)


Pannell, Charles (Leeds, W.)
Spriggs, Leslie



Parker, J.
Steele, T.
TELLERS FOR THE AYES:




Mr. Pearson and Mr. J. T. Price.




NOES


Agnew, Sir Peter
Godber, J. B.
Mawby, R. L.


Aitken, W. T.
Graham, Sir Fergus
Maydon, Lt.-Comdr. S. L. C.


Alport, C. J. M.
Grant-Ferris, Wg Cdr. R. (Nantwich)
Medlicott, Sir Frank


Amery, Julian (Preston, N.)
Green, A.
Nabarro, G. D. N.


Amory, Rt. Hn. Heathcoat(Tiverton)
Gresham Cooke, R.
Nairn, D. L. S.


Arbuthnot, John
Grimond, J.
Neave, Airey


Armstrong, C. W.
Grimston, Hon. John (St. Albans)
Nicolson, N. (B'n'm'th. E.&amp; Chr'ch)


Ashton, H.
Grosvenor, Lt.-Col. R. G.
Noble, Michael (Argyll)


Atkins, H. E.
Gurden, Harold
O'Neill, Hn.Phelim (Co. Antrim, N.)


Baldwin, Sir Archer
Harris, Frederic (Croydon, N.W.)
Osborne, C.


Balniel, Lord
Harris, Reader (Heston)
Page, R. G.


Barber, Anthony
Harrison, Col. J. H. (Eye)
Pannell, N. A. (Kirkdale)


Barlow, Sir John
Heald, Rt. Hon. Sir Lionel
Partridge, E.


Barter, John
Heath, Rt. Hon. E. R. G.
Peel, W. J.


Batsford, Brian
Henderson-Stewart, Sir James
Pickthorn, Sir Kenneth


Baxter, Sir Beverley
Hesketh, R. F.
Pilkington, Capt. R. A.


Bell, Philip (Bolton, E.)
Hicks-Beach, Maj. W. W.
Pitman, I. J.


Bell, Ronald (Bucks, S.)
Hill, John (S. Norfolk)
Pott, H. P.


Bevins, J. R. (Toxteth)
Hinchingbrooke, Viscount
Powell, J. Enoch


Bidgood, J. C.
Hirst, Geoffrey
Price, David (Eastleigh)


Biggs-Davison, J. A.
Hobson, John(Warwick &amp;Leam'gt'n)
Prior-Palmer, Brig. O. L.


Bingham, R. M.
Holland-Martin, C. J.
Redmayne, M.


Bishop, F. P.
Holt, A. F.
Rees-Davies, W. R.


Black, Sir Cyril
Hornby, R. P.
Remnant, Hon. P.


Body, R. F.
Hornsby-Smith, Miss M. P.
Ridsdale, J. E.


Bonham Carter, Mark
Howard, Gerald (Cambridgeshire)
Roper, Sir Harold


Bowen, E. R. (Cardigan)
Howard, John (Test)
Ropner, Col. Sir Leonard


Boyd-Carpenter, Rt. Hon. J. A.
Hughes Hallett, Vice-Admiral J.
Russell, R. S.


Boyle, Sir Edward
Hughes-Young, M. H. C.
Sharples, R. C.


Brewis, John
Hulbert, Sir Norman
Shepherd, William


Brooman-White, R. C.
Hutchison, Michael Clark (E'b'gh,S.)
Simon, J. E. S. (Middlesbrough, W.)


Burden, F. F. A.
Hyde, Montgomery
Smithers, Peter (Winchester)


Butler, Rt. Hn.R.A.(Saffron Walden)
Hylton-Foster, Rt. Hon. Sir Harry
Spearman, Sir Alexander


Carr, Robert
Irvine, Bryant Godman (Rye)
Stanley, Capt. Hon. Richard


Cary, Sir Robert
Jenkins, Robert (Dulwich)
Stevens, Geoffrey


Chichester-Clark, R.
Johnson, Dr. Donald (Carlisle)
Steward, Sir William (Woolwich, W.)


Clarke, Brig. Terence (Prtsmth, W.)
Johnson, Eric (Blackley)
Stuart, Rt. Hon. James (Moray)


Conant, Maj. Sir Roger
Jones, Rt. Hon. Aubrey (Hall Green)
Studholme, Sir Henry


Cooper, A. E.
Kerr, Sir Hamilton
Summers, Sir Spencer


Cordeaux, Lt.-Col. J. K.
Lambton, Viscount
Taylor, Sir Charles (Eastbourne)


Corfield, F. V.
Leather, E. H. C.
Teeling, W.


Craddock, Beresford (Spelthorne)
Leburn, W. G.
Thornton-Kemsley, Sir Colin


Crowder, Sir John (Finchley)
Lindsay, Martin (Solihull)
Tiley, A. (Bradford, W.)


Cunningham, Knox
Linstead, Sir H. N.
Turton, Rt. Hon. R. H.


Currie, C. B. H.
Lloyd, Maj. Sir Guy (Renfrew, E.)
Vickers, Miss Joan


Dance. J. C. G.
Longden, Gilbert
Wade, D. W.


D'Avigdor-Goldsmid, sir Henry
Loveys, Walter H.
Wakefield, Edward (Derbyshire, W.)


Deedes, W. F.
Lucas, Sir Jocelyn (Portsmouth, S.)
Wall, Patrick


Dodds-Parker, A. D.
Lucas-Tooth, Sir Hugh
Ward, Rt. Hon. G. R. (Worcester)


Doughty, C, J. A.
MacDonald, Sir Peter
Ward, Dame Irene (Tynemouth)


Dugdale, Rt. Hn. Sir T. (Richmond)
McLaughlin, Mrs. P.
Webbe, Sir H.


Duncan, Sir James
McLean, Neil (Inverness)
Webster, David


Eden, J. B. (Bournemouth, West)
McMaster, Stanley
Whitelaw, W. S. I.


Erroll, F. J.
Macpherson, Niall (Dumfries)
Williams, Paul (Sunderland, S.)


Finlay, Graeme
Madden, Martin
Williams, R. Dudley (Exeter)


Fisher, Nigel
Maitland, Hon. Patrick (Lanark)
Wills, Sir Gerald (Bridgwater)


Fletcher-Cooke, C.
Manningham-Buller, Rt. Hn. Sir F.
Wilson, Geoffrey (Truro)


Garmans, Lady
Marlowe, A. A. H.



Garner-Evans, E. H.
Marshall, Douglas
TELLERS FOR THE NOES:


Glover, D.
Mathew, R.
Mr. Legh and Mr. Bryan.


Glyn, Col. Richard H.
Maudling, Rt. Hon. R.

New Clause.—(AFFIDAVITS AS TO DEDUC TION OF EXPENSES.)

(1) Section twenty of the Income Tax Act, 1952 (which relates to returns of current year's chargeable income), shall be amended by inserting after subsection (4) the following subsection:—
(5) (a) Every person, who has delivered a statement under subsection (4) of this section and upon whom a notice has been served by the surveyor requiring him to verify by affidavit any deductions of expenses shown in or relevant to the statement, shall, within such time as may he required by the notice, swear and deliver to the surveyor, an affidavit in which the person—

(i) sets out the items of expenditure, by which the gross amounts of any profits, gains or income have been reduced to the respective amounts shown in the statement;
(ii) indicates how much of any such item consisted of expenditure for the provision of entertainment, hospitality, gifts or other benefits for other persons or for the person and other persons (which expenditure is hereinafter called 'entertainment expenditure');
(iii) gives such further or fuller information as to entertainment expenditure as may be required by the notice; and
(iv) states that, to the best of the knowledge, information and belief of the person and after due and proper inquiry made by him, the entertainment expenditure (or such parts of it as may be specified for the purpose in the notice) was incurred, so far as it was deducted in relation to a charge under Schedule D, wholly and exclusively for the purposes of the trade, profession or vocation to which it relates, or, so far as it was deducted in relation to a charge under Schedule E, wholly, exclusively and necessarily in the performance by the person of the duties of his office or employment;
(b) this subsection shall apply to expenditure by or on behalf of a corporate body as it applies to expenditure by or on behalf of an individual or individuals and in the case of an incorporated body or a partnership such an affidavit as is mentioned in the last foregoing paragraph shall be made by the individual who made or signed the statement under subsection (4) of this section and shall be made by him either solely or jointly with such individual or member of a class of individuals as the said notice may require;
(c) nothing in this subsection shall prevent the withdrawal at any time of any claim to deduct expenditure (but without prejudice to any penalty or other consequence of the claim) and any claim so withdrawn and the subject-matter thereof may be omitted from an affidavit made under paragraph (a) of this subsection".—[Mr. Houghton.]

Brought up, and read the First time.

Mr. Houghton: I beg to move, That the Clause be read a Second time.
This new Clause has been moved before and there have been debates on it. The Clause, in terms, gives the Inland Revenue statutory powers to call for more information than is at present possible under Section 20 of the Income Tax Act, 1952, which gives the Inland Revenue power to call upon persons who may be liable to Income Tax to make a declaration of their total income. It is the conventional Clause in the Act which gives overriding power to call for returns under the several Schedules.
The Inland Revenue has fewer powers by law to call for information than is generally supposed. The Royal Commission drew attention to this in paragraph 1051 of its Report, which says:
Every person is under a legal obligation to notify the tax authorities if he is in receipt of any taxable income: to make a return of that income if he gets a notice requiring him to do so. But there his obligation stops. He is not obliged to verify the figure that he returns by the production of vouchers, records or accounts.
There is a legend that many years ago a Cabinet Minister who made a return of his total income omitted one year an item of income which had appeared in previous years. The Inland Revenue asked him what had happened to it and, if he had disposed of it, what he had done with the money. The Cabinet Minister wrote back saying, "Please mind your own business. Section 20, Income Tax Act, 1918", or whatever date it was then. I have never had the nerve to do that myself, although I have received queries of a similar kind.
The Inland Revenue has no direct and statutory powers to call for the information set out in the Clause. I should make it clear that the new Clause does not alter the basis of assessment. It does not change the admissibility or otherwise of expenses or deductions. It does nothing but give the Inland Revenue power to call for more information, to call for it in the more solemn form of an affidavit and to render a taxpayer making a false statement liable to the penalties of the law, which can be heavier than, or perhaps in addition to, the penalties already prescribed under the Act.
It may be asked what the purpose is of giving the Inland Revenue more statutory power to call for this information if it will make no difference to the liability of the taxpayer when the Inland


Revenue has received it. It may also be asked whether this information cannot be obtained now by one means or another, direct or indirect—directly by inquiry, and indirectly by raising estimated assessments or disallowing deductions or claims, or by one of the various ways and means which the Inland Revenue has of persuading the taxpayer to treat with it.
It must be admitted that this new Clause does not do what we on this side would like. We would like to add to the power to call for more information, considerable change in the admissibility of some forms of expenses from tax liability. We would like to limit the kind and the amount of expenditure now chargeable against business and professional profits for tax purposes
9.45 p.m.
I think I heard the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) ask "Why do you not do it?" That would be a perfectly sensible question were it not that the rules of order prevent us from doing it. The noble Lord should surely know by now that what we cannot do in Committee on a Finance Bill is to raise a charge on the taxpayer. Only the Government can do that, by the Budget Resolutions. I have, therefore, to pursue this matter, as others have done in previous years, hobbled by the rule of procedure, which prevents us from carrying this new Clause as far as we would like. Its effect is bound to be limited on that account.
The Committee may ask, "if you want more information about these things, what is it all about? Why do you want more information, and what will you do with it when it is given to you?" To that I would reply that anyone who stands outside our luxury hotels and expensive restaurants today knows what this is about. It is about commercial, professional and industrial extravagance; the use of entertainment as a means of business, heavily chargeable against tax liability.
Time and time again one can see taxpayers, obviously impoverished by the present high level of taxation, emerging from luxury entertainment and hospitality which is charged against the profits of business and industrial undertakings.

We all know that motor cars, to a very large extent, are run on business expenses, and chargeable against firms' profits. At the present time, it is possible for many in the professions, in business and in industry to build into their standard of life noticeable—even ostentatious—amenities or luxuries under the guise of expenses incurred wholly and exclusively for the purposes of a trade or profession. There is no denying that. It is common knowledge.
The Royal Commission went into the more generous rule under Schedule D for the charging of expenses against profits wholly and exclusively laid out for the purposes of trade. It acknowledged that that offered scope for the deduction of expenses from taxable profits which would be ruled out under the stricter rule of Schedule E, which applies to those holding office or employment. As the Committee knows, the condition is that the expenditure must be wholly, necessarily and exclusively incurred for the purpose of the office. These are two definitions, widely different in their application, and widely different in the scope they give for the use of expenses as a supplement to normal living expenses——

Mr. Simon: The hon. Gentleman will surely recognise, if my recollection is right, that what the Royal Commission did was to recommend the widening of the Schedule E rule.

Mr. Houghton: Oh, yes—the hon. and learned Gentleman has anticipated me by a moment. I was just drawing attention to the difference between the rules under the two Schedules. The Royal Commission proposed to bring the Schedule E taxpayer on more equal terms with the Schedule D taxpayer by relaxing the rule under Schedule E, and not by tightening up the rule under Schedule D. The proposal was that under Schedule E, in place of the formula about the expenditure being wholly, necessarily and exclusively incurred, it was, speaking from memory, to be wholly and reasonably incurred. It was a relaxation of the present rather strict rule.
The minority Report proposed to deal with the matter in a different way. The minority, however, again realised the difference in practice, between the two


rules, and the minority Report said that it would be just as well to acknowledge the difference, to face up to it, and to try to deal with it by a change which differed substantially from that suggested in the majority Report. The minority Report proposed that Schedule D taxpayers who wanted to have the benefit of earned income relief should submit to the stricter rule under Schedule E, but that if they preferred the more liberal rule under Schedule D they would surrender their right to earned income reliefs on their profits or gains.
As I said a little earlier, we cannot, in this new Clause, prescribe either of those remedies, or put forward alternatives to them. All we can do is to propose that the Inland Revenue shall have stronger powers to call for certain information, and the information that the Inland Revenue would be permitted to call for is set out in the new Clause. It refers especially to expenditure for the provision of entertainment, hospitality, gifts or other benefits for other persons, further or fuller information as to, entertainment expenditure and so on.
This is an attempt to attack the misuse of the reliefs given for tax purposes to this kind of expenditure, which, I am satisfied, the Committee will agree is noticeable today. How else could one account for the expenditure which is so obvious in many places, where we know that much is being had on vouchers on the firm? The Committee may then ask whether the calling for information would make any difference.

Mr. Nabarro: What does the hon. Gentleman mean by vouchers on the firm? Does he mean luncheon tickets issued to clerical staff, which my right hon. Friend the Chancellor of the Exchequer the other day said should not exceed 3s. per meal? What otherwise does he mean by these vouchers?

Mr. Houghton: The hon. Member for Kidderminster (Mr. Nabarro) is not so simple as he tries to make out.

Mr. Nabarro: I am a very simple chap.

Mr. Houghton: The hon. Member keeps on saying that he is a very simple chap, but that is merely a smokescreen for an ingenious mind.

Mr. Nabarro: Would the hon. Gentleman answer my question? What are these vouchers? Is he really suggesting that company directors and others associated with them go around with a packet of meal vouchers for 3s. each stuffed in their waistcoat pockets?

Mr. Houghton: The hon. Member is much more contemptuous of these meal vouchers than many of his contemporaries in the business world. I am referring to those who go to restaurants to entertain each other and sign the bill which goes to the firm to be paid.

Mr. Nabarro: That is exactly the explanation on which I am trying to pin the hon. Gentleman's ears back. When the invoice goes to the company it forms the subject of an investigation by the company's auditors. Then the company's auditors are required by the Income Tax Statues to declare that business expense to the Inland Revenue which will assess it to tax unless it is proved to be an expense wholly, exclusively and necessarily in pursuance of the business.

Mr. Houghton: I do not think the hon. Gentleman has the sympathy of my hon. Friends in this matter. Apart from that, let him consider the large number of director-controlled companies where the formalities of getting sanction for expenditure are much easier than in the bigger companies. In any case, if the expenditure is certified as being wholly and exclusively laid out for the purposes of the trade, the auditors cannot question it; neither can the Income Tax authorities. It is no good the hon. Gentleman suggesting that this is not being done. It is being done, and on an ever-increasing scale. We cannot do business in this country now except through the bottom of a sherry glass.

Mr. Nabarro: I am merely pointing out the inaccuracies in the hon. Gentleman's references to these 3s. meal tickets.

Mr. Houghton: It is the three guinea meal tickets that I am talking about.
I will come to my conclusion and to the only point which I am able to put forward in support of the terms of the new Clause, having regard to the limitations placed upon our action by the rules of order. It is that it can discourage expenditure of this kind which the taxpayer may think will be challenged by


the Inland Revenue as not being wholly and exclusively laid out for the purposes of trade. It is a deterrent; it is not a cure for this misuse of Income Tax reliefs for expenditure which goes beyond what is legitimate for the purpose of business, profession or trade.

Mr. Nabarro: Year after year these accusations concerning a class of person who is called a company director are flung around the Committee during the consideration of the Finance Bill. I intervene only for a few moments because I am painfully aware from many engaged in industry, business and commerce of the meticulous methods of the Inland Revenue in investigating business expenses in present circumstances.
There cannot be any doubt at all—and I hope that my hon. and learned Friend the Financial Secretary will readily confirm this when he replies—that the whole of the business expenses incurred by a company director are assessed to Surtax and to Income Tax on his personal account at the time of the company's audit and at the time he has to render his own personal returns in respect of his income.
The whole of these business expenses, whether he is assessed to Schedule D or Schedule E, are added to his direct income. Then he seeks to deduct as a legitimate expense when wholly, necessarily and exclusively incurred in pursuance of the business, the sums involved in respect of the expenses. He has to prove that they are expenses. Not only has he to prove it to the company's auditors, who are chartered accountants, but later they have to prove it to the Inland Revenue.
I admit that there may be evasion of tax in this field on a relatively limited scale. Of course, it is exceedingly difficult to distinguish between legitimate business expenses for entertainment purposes, and illegitimate expenses. For example, I readily declare my interest, as a company director, as a member of the organisation much maligned by hon. Members opposite—the Institute of Directors. Why it should be maligned I cannot think.
Company directors are involved in the conduct and negotiation of business very often involving substantial sums in overseas sales. It is inescapable that they

must incur expenses for entertainment. Whether those expenses are lavish or not, whether they are appropriate to the actual sum of the business in hand during the course of the negotiations, is often arguable. Whether a company director entertaining three or four Americans or Canadians over here spends £20 or £15 in giving them a good dinner is, surely, a matter for his own judgment, and it should be gauged against the background of the amount of business which results from the entertainment he has given.
10.0 p.m.
I ask hon. Gentlemen opposite, when they so readily attack company directors in this country as a class, to recall that, when those same British company directors go abroad, they are often, in foreign lands, given entertainment much more lavish than they return to the foreigner when he visits us here. But trade is a two-way business. Trade is lubricated everywhere by conviviality of every description. I myself take liquor only in small quantities, but my guests often prefer larger quantities than I. If there is a substantial order from overseas contingent upon the extent and the lavishness of the entertainment which I am prepared to give foreign buyers visiting me, I shall, indeed, be lavish in what I offer them. I should be a fool were I to do otherwise. I should be a fool also in relation to the wider public interest of earning foreign currency and promoting exports.
Much of the malign statements flowing from right hon. and hon. Members opposite on this count are ill-informed and ignorant. In earlier years, it was a right hon. Gentleman the Member for Huyton (Mr. H. Wilson) who launched these attacks, invariably late at night, when there were Government Whips buzzing around these benches calling upon Government supporters such as myself to desist from making speeches.

Mr. Diamond: Shame.

Mr. Nabarro: This evening, I could not be so temperate. I felt that a rejoinder from one engaged in business and commerce would be appropriate at this moment. I believe that the law in regard to business expenses and allowable claims for entertainment costs in industry, commerce and business generally should be widened and relaxed in


the public and national interest, not made harsher as hon. Gentlemen opposite suggest.
I hope that my hon. and learned Friend, when he replies, will be careful to confirm—I shall speak again if he does not do so—the exact procedure in regard to the assessment of expenses and their treatment by the Inland Revenue according to the financial Statutes in their present condition without amendment along the lines which hon. Gentlemen opposite suggest. I trust that the new Clause will be rejected.

Mr. Cronin: It has been most helpful to have this contribution from the hon. Member for Kidderminster (Mr. Nabarro).

Mr. Nabarro: Stimulating, did the hon. Gentleman say?

Mr. Cronin: No, I said that it was most helpful to have his contribution. His excellent brief on behalf of the Institute of Directors serves to highlight our arguments. I was very impressed by the way that this particular subject has induced him to rise to his feet four times in ten minutes. Moreover, he has assured us that he will rise to his feet again——

Mr. Nabarro: If I do not get the right answer.

Mr. Cronin: —if the Financial Secretary's answer is not satisfactory to him. One sometimes wonders whether the hon. Member for Kidderminster has sworn to eternal loquacity by some sort of inverted Trappist vow. His interventions are so frequent.

Mr. Nabarro: I have not spoken for six weeks.

Mr. Cronin: It seemed to me that some of his arguments were so loose that, were I not convinced of his temperate habits, I should assume that they had been lubricated by conviviality this evening.
The hon. Member suggested that company directors were in some difficulty in that they had to prove to their auditors that their entertainment expenses were necessary. The hon. Gentleman did not stress one important point, namely, that these auditors are employed by the company directors and, therefore, are not in a position to subject

the company directors to savage criticism.

Mr. R. Gresham Cooke: In fact, the auditors are employed by the shareholders, not by the directors.

Mr. Cronin: That almost receives the prize for the most humorous remark this evening.
I think that we should leave the hon. Member for Kidderminster and address more serious attention to a Hydra-headed problem which has troubled the Committee for many years. As my hon. Friend the Member for Sowerby (Mr. Houghton) said, people who pay tax under Schedule E present great difficulty because their expenses have to be wholly, exclusively and necessarily in the performance of their office or employment, but people who pay tax under Schedule A, who represent the aristocracy in taxation, have the much happier rule that their expenses have to be wholly and exclusively expended for the purposes of their trade, profession or vocation.
This presents serious difficulties, and I think that the person who is in a very great difficulty is the inspector of taxes. He is often in a considerable dilemma as to whether the expenses contain very substantial elements of personal benefit rather than expenses which tend to produce increased profit in the trade, profession or vocation.
Another great difficulty, which my hon. Friend the Member for Sowerby pointed out, is that the Opposition are always severely limited in making constructive suggestions by the rules of order. What makes the question of expenses as a general principle a very difficult subject of debate is that we have to consider international trade. If we limit severely the expenses of businessmen in this country obviously they do not get the same advantages vis-à-vis visiting other countries.

Mr. Nabarro: That is my argument.

Mr. Cronin: Indeed. That is a consideration which must be taken into account, but, nevertheless, there must be some limitations put upon them.
My hon. Friend has referred to the numerous personal perquisites obtained by directors of public, private and


limited companies by way of cars, chauffeurs, gardeners, servants, living accommodation, and foreign holidays. These are serious abuses, but they are not so conspicuous. Anyone who lives in the centre of London or in a large town comes across this extraordinary and excessive eating and drinking at the expense of the Inland Revenue—in other words, at the expense of all of us—in what is apparently meant to be an interest in obtaining business for the profession or vocation.
Some of my hon. Friends will agree that the most unprecedented guzzling and swizzling has taken place in London of recent years at the expense of the Inland Revenue, and that the effect on other taxpayers is very unfortunate.

Mr. Nabarro: Does the hon. Member drive a Bentley?

Mr. William Ross: Just one.

Mr. Cronin: They feel very much less disposed to pay their taxes when they see these tremendous examples of tax avoidance. Hon. Members opposite frequently refer to the desirability of wage restraint on the part of trade unions.

Mr. Nabarro: I am glad to have the hon. Gentleman's confirmation of my argument above the importance of overseas trade, but, on the matter of expensive motor cars, does he not himself drive a Rolls-Bentley? Should not he at once declare his interest?

Mr. Cronin: I cannot see the relevance of that intervention. My car——

Mr. Nabarro: I cannot afford a Rolls-Bentley.

Mr. Cronin: —is one of extremely mature years——

Viscount Lambton: Viscount Lambton (Berwick-upon-Tweed) rose——

Mr. Cronin: I cannot give way much more—which would be traded in for a modest sum. Here again, the lubrication of conviviality is arising.
It seems to me that this form of tax avoidance is conspicuous and scandalous. That is why it is desirable that the Clause should be given serious consideration. Many of my hon. Friends

would say that the whole problem of expenses should be comprehensively solved, but I would not agree. This problem must be tackled piecemeal. If we can deal with one thing at a time, we will be doing very well.

Mr. Nabarro: Start with Bentleys.

Mr. Cronin: Hon. Members on both sides will be familiar with the old Chinese proverb that he who tries to catch ten fleas with all ten fingers will not catch anything at all. The same principle applies to tax avoidance.
The Clause has the advantage that it does not incommode in any way the ordinary respectable taxpayer. It is administratively simple. It does not involve any extra staff for the Inland Revenue and it does not involve much extra work. It might be argued that a fraudulent person would not object to signing an affidavit of the kind proposed, but it would have the wholesome deterrent effect of indicating to him that he was an object of suspicion.
The formality of signing an affidavit would have an impressive psychological effect on a would-be offender and there is always the sanction of a prosecution for perjury. It may be argued that already a declaration has to be verified and that a tax surveyor can disallow expenses. Then there is the procedure of appeal, when expenses can be carefully investigated. Nevertheless, it is clear from the patent nature of this abuse that these powers are inadequate.
Therefore, I hope that when the Financial Secretary replies, if he does not accept our new Clause, either in its existing or in some modified form, he will say what constructive measures the Treasury has to deal with this serious problem, which is becoming a national scandal.

10.15 p.m.

Viscount Hinchingbrooke: The hon. Member for Sowerby (Mr. Houghton) rightly said that the new Clause would not collect another penny for the Revenue. It simply devises a new set of principles in the collection of more money from Schedule D taxpayers which a Chancellor of the Exchequer, if so attracted by the proposal, would introduce in formal form in another year—or which the hon. Member's own right hon. and hon. Friends,


if they are so fortunate as to get into power, will no doubt introduce.
I agree to some extent with some of the arguments put by the hon. Member. I think there is something rather disagreeable in the roaring, soaring commercial life which is now apparent in this country. It is only because it shows a marked differentiation on the side of the business man and as against the ordinary professional man that there is this complaint. It is quite natural that the complaint should arise principally from the other side of the Committee, although I assure the hon. Member for Sowerby that many of us on this side are equally disquieted by the trend.
The question is how to make the correction. Taxation, Income Tax, and Surtax, have risen to such a scale today that it is necessary to have in the export trade the processes described by my right hon. Friend the Member for Kidder-minister (Mr. Nabarro)—the giving of equivalents in entertainments in various countries overseas. It is natural that the comercial world has been allowed to escape from the consequences of taxation and has used the formula in the Income Tax Act, 1918, of "wholly and exclusively" to get away with it. That dastardly word "necessarily" which keeps the Schedule E taxpayer down to a comparatively lowly state of existence has not been applied to the commercial world, and it is entirely due to a sort of fortuitous occurrence, aided and abetted by the Inland Revenue and various Governments who have not proposed any changes, that the commercial world today is keeping abreast of the times by living the sort of life and giving the sort of entertainment and existing on the sort of platform of society which is necessary in the modern capitalist world in which we have to compete.
But it leaves the Schedule E taxpayer very far behind. It would be out of order if I tried to use now some of the arguments which I would hope to introduce on the proposed new Clause—"Schedule E: Expenses"—standing in my name and the names of some of my hon. Friends, which would try to carry out the recommendation of the majority Report of the Royal Commission on the Taxation of Profits and Income to cut out these formal words as applied to the Schedule E taxpayer and introduce the very words which the Commission

recommends in its great document, namely,
all expenses reasonably incurred for the appropriate performance of the duties …
I have been looking into this matter a great deal in the last few days, in the anticipation that my new Clause would be called, and I find that very little indeed can be done for the Schedule E taxpayer. Last year, the Chancellor was good enough to give us the concession that contributions to professional and other societies should stand against tax. After that, we are left with very small perquisites indeed—uniforms, books, clothes and a certain amount of expenses associated with maintaining cars—which if my Clause were allowed to go through would cost the Exchequer only £4 million a year, a mere bagatelle.
There is almost nothing that can be done for the Schedule E taxpayer to elevate him to the way of life which the great commercial world enjoys today. That is a sorry state of affairs to recognise in this day and age. I do not know what the answer can be, but perhaps it is to proceed on the downward path of lowering taxes on income, reversing the process that initiated the different way of life between Schedule D and Schedule E taxpayers. Only upon that basis will it be possible for the great class of professional men and women again to enjoy the standard of living to which they are entitled in competition and in equality with the commercial world.

Mr. MacDermot: A great deal of what the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) has been saying will command general agreement in most parts of the Committee. He has been approaching this question primarily by looking at it from the point of view of the Schedule E taxpayer, perhaps in the higher ranges, the professional man, and the bitter pills which he has to swallow when he sees the kind of existence his friend in the commercial world is able to get away with.
There is no doubt that our society today is riddled with these mutual envies in the field of taxation. Everyone who has an expense account or is able to claim expenses at all is looking over his shoulder to see how much the other fellow has been able to get away with. The vast majority of the population are


merely spectators of this game that is going on, because they have no opportunity to claim expenses at all. They have their Income Tax deducted under P.A.Y.E. and that is that.
To show the injustice of how this works, we know that, as the hon. Member for Kidderminster (Mr. Nabarro) has been explaining to us, the business man who is entertaining the foreign buyer is entitled to, and sometimes may have to, entertain him at the most expensive restaurants with meals which cost about £5 a head. The whole of that expenditure is put down and allowed as a charge for tax purposes, whereas the local government official, who has to stay late at the town hall to attend the council meeting and who wants to go out and get an evening meal, is not allowed to charge the 3s. 6d. which he paid for his modest evening meal because his duties require him to remain until ten or eleven o'clock at night for the council meeting. Those are the kind of differences with which we are dealing.
The hon. Member for Kidderminster, in one of his usual rumbustious interventions, has given us the justifications for the Schedule D rules for the commercial world, but that is not what this Clause is about.

Mr. Gresham Cooke: The hon. Gentleman is talking about Schedule D as applied to industry. My interpretation is that Schedule D applies to professions.

Mr. MacDermot: In some cases; in other cases it does not.

Mr. Gresham Cooke: Generally it does.

Mr. Gordon Walker: The employed professional is under Schedule E.

Mr. MacDermot: In any event, these are the questions with which this Clause is concerned. It is concerned with trying to put an instrument in the hands of the Revenue authorities to try to help to check the undoubted abuses which exist in this field, and which every hon. Member who is honest with himself will admit exist. They exist on a widespread scale, they give rise to a great deal of social disunity and they result in a severe loss to the Revenue.
We are chided with the fact that much of the criticism directed on this matter is ill-informed. That is true, and it is true for the reason that it is difficult to get at detailed facts and circumstances. It is rare that prosecutions result on these matters. It is rare partly for the reasons given by my hon. Friend the Member for Sowerby (Mr. Houghton) in opening this debate, because of the inadequate powers in the hands of the Revenue authorities. Consequently, as he said himself, they have certain powers by which they can induce the taxpayer to trade with them, and it is a disgraceful state of affairs that this should become a matter for bargaining and for trading, as it so often does, rather than for proper proof.

Mr. Nabarro: Why?

Mr. MacDermot: Because it is a matter that ought to be proved, and ought to be proved with proper evidence, instead of the kind of package deal we get at the moment between the local inspector and the local accountant trying to arrive at a compromise agreement on a large number of assessments for a large number of his clients. That is the kind of thing that goes on.
However, there is one source from which at times one can get accurate information about what goes on. That is in the divorce courts, where we get maintenance summonses between husband and wife, in which it becomes necessary to establish what is the real income of the husband. He swears an affidavit in which he puts forward the information which he probably puts forward before the Income Tax inspector, and his wife sometimes supplies a lot of additional, useful information which does not normally go to the Income Tax inspector. At times, of course, the evidence given by the wife is challenged, and then there may be some dispute about it, but on other occasions the husband or his representative does not challenge the facts given in evidence by the wife. In that case, one may assume that one is getting something like the truth of the matter.
A friend of mine who practises regularly in the divorce courts, as the hon. and learned Gentleman the Financial Secretary himself used to do, has given me two instances which illustrate the kind of thing which goes on. The first


is of a case where the husband was, in fact, the owner of a private company, that is to say, he held virtually all the shares, probably all except one, which was held by his wife. The company, which was here in London, was engaged in promoting theatrical productions.
He had entered into an agreement with his company under which he was required by the company at all times to reside in the suite which the company had taken in an expensive hotel in the West End. He was also required wherever he went in London to drive about in the company's Rolls-Royce, and so on. Under that agreement he received a salary of £1,500 a year, and that was the salary which he declared to the Inland Revenue.
In fact, he paid no tax, because he borrowed large sums of money from the company and set off the interest payable against his declared income of £1,500. Of course, all that was a racket and he ought to have been assessed for a great deal more. No doubt someone certified those accounts and that was the evidence on which the accounts were passed by an inspector of taxes. Nevertheless, it was a complete and utter racket.
The second case concerned a gentleman with a private company in the Midlands. He was a director of the company holding all but a few shares. Nominally, he had a salary of £2,000 a year. He lived in a house which was owned by the company and all the normal outgoings in the way of rates and taxes were paid by the company. There was an indoor staff of three, two gardeners and chauffeur on the company's payroll. There were two cars—he had not got up to the standards of the hon. Member for Kidderminster—at his disposal which were owned by the company.
He had an expense account of £1,000 a year. The explanation put forward in support of all this was that the house had to be kept by the company so that he could entertain those overseas buyers to whom the hon. Member was referring a moment ago. The wife's evidence, which was unchallenged, was that for the past two years there had, in fact, been one visitor, who had been entertained in the house for business purposes. That husband did not stop at that: his mistress was also on the payroll of the company.

Mr. F. P. Bishop: Should not all those benefits have been notified on a form submitted to the authorities?

Mr. MacDermot: I am sure that they should have been.
The point I am making is that those are the abuses which are going on and which are not being discovered. The intention of the Clause is to give the Revenue authorities additional powers so that such rackets will be detected and there will be power to compel these crooks to make affidavits about the sort of swindles which they are perpetrating, since that will be a severe deterrent and will prevent them from doing that sort of thing in future.
I sincerely hope that the Government will be able to accept the principle of the Clause and, if they do not like its form, to introduce one of their own. I am very doubtful about it, because it is only two years ago that there was introduced a Finance Bill whose declared purpose was to make more room at the top. If this Clause is accepted, it will cause a certain amount of contraction at the top, a contraction which is long overdue.

10.30 p.m.

Mr. Diamond: Before saying anything on this topic I think that I ought to declare my interest straight away, as I am sure that the hon. Member for Kidderminster (Mr. Nabarro) is about to ask me. May I say to him that I am, in the usually accepted term, a married man with a motor car?

Mr. Nabarro: Is it a Rolls Bentley?

Mr. Diamond: No, it is a Morris.
Having said that, I would like to consider this Clause a little more seriously than some hon. Members opposite have done. I am sorry that I cannot associate myself entirely with everything that has been said on both sides of the Committee.
The debate has covered the general question of tax avoidance, the more specific question of the comparison of Schedule D and Schedule E rules and, finally, and right at the end and to a very limited extent, the actual Clause before us. Therefore, in saying a few words about what has been said by others I make this first point. We are all against tax avoidance. If I had to decide the priority in which these tax avoidance matters should be dealt with, I would put entertainment expenses at the bottom of the list.
If one really wants to avoid tax—and there are so many methods of doing this—the least useful and profitable method is by way of entertainment expenses. A great deal of trouble is involved and negligible amounts of money are made, whereas the other opportunities open to one under existing legislation are enormous. Therefore, it is rather inappropriate to dwell at too great length on the avoidance of tax which arises from exaggerated expense claims.
As to the second point about Schedule D and Schedule E expenses, may I say to the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke) that he has repeated what has been said in many other quarters—the complaint of the professional man against the standard of living of the business man. The employee is assessed under Schedule E whether he is employed in a professional or a business capacity.
The essence of the matter is that we live in a society in which we think it

better to recompense business men on a higher scale than we recompense professional men, including Cabinet Ministers, Members of Parliament and all sorts of other people. This is the society in which we live, and it is a complete waste of time and indicative of the sort of envy which does not help in approaching the problem of tax collection to spend too much time on trying to indicate and prove that this stems from Income Tax and Income Tax rules. It certainly does not.
There are obvious reasons why Schedule D and Schedule E should be expressed differently. Quite obviously, if we are to have a system of tax collection whereby we get enormous amounts from profits we must leave it to the business man to arrange his business. That means that he is going to decide which are expenses and which are not. In the case of the employee, where there is no one to decide, it is quite appropriate that the inspector of taxes should have some discretion in the matter and introduce the word "necessary." On these two main issues I do not agree with everything that has been said on both sides of the Committee.
We now come to the specific Clause which is an attempt to deal with a problem that does exist. The hon. Member for Kidderminster referred to the enormous advantage of taking one's American customer out to lunch. It will be obvious to all in the Chamber that there are many restaurants into which we go in which we see many men having lunch who do not always speak with a markedly American or Canadian accent.
It is obvious that this expenditure is being incurred on a large scale. The difficulty arises in deciding whether it is being incurred for proper business reasons or not. It may be thought that there is not sufficient attention paid by those two narks of the machinery of tax collection, the tax inspector on the one hand and the accountant on the other. I can only say from my own experience, which is what most of my professional colleagues say and exactly what is said by inspectors of taxes, that I am heartily sick of having to probe expenses claims and of having to spend hours and hours on frustrating, detailed examination of them. I am fed to the teeth with it, if I may use words which


indicate my feelings but are not of the best parlance in this Chamber.
I do not think that as the law is at present, and with the amount of information which is now available to the Revenue and the accountant, much more can be done to probe the reason why it seems to be that many people are able to afford a rather expensive lunch. It is thought to be the case that it is on the Revenue. I must say, with reference to the cases which my hon. Friend was mentioning and which came from the Divorce Court, that I myself have learned to adopt the simple rule that I believe in tax stories when I see them myself.
I find that only too often people like to swap stories. It even gets to this stage, that one of my clients was telling me what an accountant had done the other day for another person, and how much better an accountant he was, and what the other person had done to get away with tax—and I knowing the whole time that that other person was my own client. It is a curious sort of attitude of liking to be able to boast of what one is able to get away with from the Revenue. I doubt whether second-hand evidence of what has gone on in the Divorce Court, and given perhaps by a person who has not the best reasons for putting the most favourable interpretation on the words of actions of a spouse about to be divorced, is the most reliable guide to how we should go about improving our machinery of tax collection.
What we are concerned with is, after all, trying to arrange tax fairly as between different taxpayers. We are not setting up a moral code to say whether anyone should or should not have a three, four or five course lunch. I almost wish we were, for that would give us much more power, and might be a more sensible arrangement in tax collection. We are not deciding whether different sections of the community should have fair shares. They do not. I feel this most strongly—more than the noble Lord does. But Income Tax and details of expenses are not the method by which we can improve the sort of fair shares which I should like to see between different sections of the community and real equality of opportunity.
We must remember that all we are trying to do is trying to see that there

is fair contribution of tax by different sections of taxpayers. We do have a system of tax under which, by and large, the machinery is based on the individual return, and the individual's sense of his responsibilities is a most important element in the return. It is really a self-collecting system. It would be most expensive if another way were to be adopted.
I think that a lot can be said for this new Clause. The hilarity with which the matter has been discussed—and wherever it is discussed in all sorts of circles—indicates that albeit the inspector and the accountant play their part, as far as I can see, to the full—absolutely to the full—it is a great waste of their time. It is unremunerative to the accountant. I do not know how the inspectors cost their time. Nothing is more unremunerative and time wasting than working out whether a claim for £24 16s. 2d. is justified or not and where Mr. B went to on 16th July.
Notwithstanding that, I think it is right to say that wherever this is discussed there is an hilarity which shows that the individual does not regard this topic with sufficient earnestness. Notwithstanding everything that the accountant and the inspector do—and they do everything they can in the circumstances—a further contribution could be made by the individual. If the taxpayer realised how important it was that he should play his part, and that this is a burden which rests upon all of us, there is a likelihood that the machinery would work more smoothly, and be seen to work more smoothly.
In many circumstances there is a good deal to be said for the taxpayer being asked to swear an affidavit in exactly the same way as individuals swear affidavits when making statements of return, and in many other cases where an individual takes upon himself the responsibility of collecting information and putting it before a Government Department with a view to his being taxed on it in some other form or other. There is often an affidavit to go with it. This is a regular procedure, and I think that it would help in this case.
I therefore support the principle of the new Clause and I hope that the Government, realising that I have spoken as


objectively as I can, will give it sympathetic consideration.

Mr. Simon: The Committee will, I think, agree that the hon. Member for Gloucester (Mr. Diamond) has spoken objectively. The hon. Member for Sowerby (Mr. Houghton) described himself as being hobbled by the rules of procedure when he moved the new Clause, but as he went along it seemed to me that he got about rather skittishly for all his hobbles, and the debate has ranged widely beyond the substance of the Clause.
We are not concerned with the difference between Schedule D and Schedule E rules as to expenses. We are not discussing whether it is desirable to have the test of the word "necessarily" in the case of all expenses claims. We are not really concerned with the excessive eating and drinking which go on in the centre of London—if they do go on. We are not concerned with the taxation of benefits in kind. We are not concerned with the taxation of the company car in which the director drives, or the bank manager's house, or the miner's free coal. Those questions are not affected by the Clause. The Clause is concerned only with machinery.
But as the debate has ranged so widely, I would say that, in the first place, I find myself in substantial agreement with my hon. Friend the Member for Dorset, South (Viscount Hinchingbrooke), that most of the complaints that arise in connection with this matter—and I am sure that the hon. Member for Gloucester is correct in saying that they are based on envy—arise because of the high level of taxation under which we have been burdened for so many years.
Secondly, my hon. Friend the Member for Kidderminster (Mr. Nabarro) is right when he says that in the case of the company director or the higher paid employee—anybody who has a salary of over £2,000 a year—the test is far stricter. He does not escape the tax liability by describing any emolument as expenses. Indeed, money paid to him as remuneration is added to his basic salary, and the onus is on him to establish that he has incurred the expenses which he is claiming. The same consideration applies in the case of

benefits in kind. The benefit in kind is added to his basic income.
Having said that, I come back to the substance of the Clause. It is concerned with none of the things over which so much of the debate has ranged. The simple question which is raised by the Clause is: are the powers of the Inland Revenue to obtain information at present sufficient? That poses a fundamental question relating to the liberty of the subject. I should have thought that all in the Committee were agreed that the State must have wide-ranging powers these days. It has to carry on the business of the State, it has to carry on the administration of justice, it has to maintain law and order, it has to collect the revenue. For all this the State needs wide powers. But surely we are all agreed that it should be given no more power over the individual than that which is absolutely necessary to carry on these functions. It is because we believe that the powers to obtain information which the Inland Revenue have at the moment are sufficient that I could not advise the Committee to accept the Clause.
We have heard a good deal about what the Royal Commission said. It is worth while remembering that neither the majority Report nor the minority Report of the Royal Commission commended this proposal. It was not part of the Commission's proposals. The reason for that is that the powers of the Inland Revenue to obtain information are very extensive. Perhaps the Committee would bear with me for a moment while I describe what they are. In the first place, if the inspector is not satisfied with the evidence produced by a taxpayer in support of any deduction, he has a very simple and very effective remedy. He can disallow the deduction. If he does that he leaves the taxpayer to establish his claim by means of an appeal, and immediately the onus is on the taxpayer, quite apart from the general onus of the taxpayer in the case of an employee with a salary over £2,000 a year or a director. Thus, by disallowing a deduction the inspector places the onus on the taxpayer.
The appeal is heard by the Commissioners. Before the Commissioners the onus is on the taxpayer to establish his case by positive and adequate evidence. Nor does it stop there by any means, because the Commissioners have power


to receive evidence on oath, and they frequently do. They can receive evidence orally on oath if necessary, not merely by affidavit as the Clause proposes. They can go further; they can receive evidence on oath from the appellant or from his employees. They can summon and examine any other person whose evidence they think is likely to assist them. In the case of appeals concerning business profits, they are authorised to call on the taxpayer at their discretion to produce accounts and written statements dealing with the matter arising from their decision.
These are extensive powers. In cases where they suspect fraud or wilful default they can go still further, because they can require the production for inspection by a Revenue officer of all business books, accounts and documents containing information about transactions of the trade or profession. It seems to me, therefore, with respect, that the whole basis of the criticism from hon. Members opposite is completely misconceived. It leaves out of account the very wide powers which the Inland Revenue have to obtain information.
This is a machinery Clause. I do not doubt that we are all agreed that the State should not be given powers over the individual greater than those which are required for the necessary carrying out of the State's functions. In this respect the State has sufficient powers at the moment, and therefore the Clause should be rejected.

Mr. Gordon Walker: The Financial Secretary, naturally and inevitably, tried to narrow the debate to the exact form of the Clause, but he knows the inhibitions of the rules of order upon an Opposition, and it is certainly true that our real motive in putting down the Clause, apart from the value which we think it would have if accepted, lies in our feelings about the scandal of Schedule D expenses. I agree with my hon. Friend the Member for Gloucester (Mr. Diamond) that they are a branch of a much bigger tree, and that there are bigger and more important branches on the tree of tax-dodging. None the less, the expenses branch is an extremely important one.
Naturally, there are difficulties, and my hon. Friend the Member for Gloucester has set forth some of them,

but there are two aspects which seem to me impossible to get away from. One is that the employer or the self-employed person fixes, in effect, his own expenses, which can hardly be challenged. The hon. Member for Kidderminster (Mr. Nabarro), who is not with us any more—and it is a great relief to know that he will not speak again—based his argument largely on the fact that only the employer can decide what is an expense necessary for the earning of profit and the carrying on of his business—whether it be a machine, an expensive meal, a house, or anything.
The other thing one cannot escape is that, as a result, there is an element of public subsidy in a great deal of very lavish expenditure—what the hon. Member for Kidderminster called conviviality in all directions, about which my hon. Friend the Member for Lewisham, North (Mr. MacDermot) gave a number of details. That is all expenditure in which there is an element of public subsidy, because there is tax remission in it.
The noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), in a speech that impressed both sides of the Committee, expressed his grave disquiet over what we might call fiscal immorality developments that are extremely disturbing. In this matter, the standards of honesty are certainly much lower than they used to be—there is little doubt about that. The idea that tax dodging is quite a good thing is spreading, whereas not so long ago it was regarded as a very bad thing which no decent person would do. The noble Lord is perfectly right there.
It is also creating social envy. Under Schedules D and E there is injustice as between one taxpayer and another, and everyone who gets away with the expenses racket makes someone else pay more tax, as the State has to raise a given amount in taxation. That produces a great deal of social envy.
There was a lot in what was said by the noble Lord and by the hon. and learned Gentleman. This problem has, in part, arisen from the very high marginal rates of taxation. There is a tremendous incentive to commit acts of what might be called fiscal immorality, and I agree that it is better to tighten things up in the whole of this


field. That would deal with capital gains and many other things. That seems to be a proper and desirable objective, but it is one that this Government are not pursuing in the slightest degree. I would be in favour of it. We would have much better public morality.
The rules of order have inhibited us putting into this new Clause all that we should have liked and we have had to do the best we could while keeping within the rule of not imposing a charge. We think that this provision would be

very useful. It is important, as one weapon in this whole battle against tax dodging, to tighten the administration, as this new Clause would. We therefore feel it necessary to carry our view into the Division Lobby, but we would, were we to come to power, bring in much more radical and more far-reaching measures to deal with the whole of this problem.

Question put, That the Clause be read a Second time:—

The Committee divided: Ayes 91, Noes 146.

Division No. 132.]
AYES
[10.55 p.m.


Allen, Scholefield (Crewe)
Howell, Charles (Perry Barr)
Popplewell, E.


Beswick, Frank
Hughes, Emrys (S. Ayrshire)
Prentice, R. E.


Blackburn, F.
Hughes, Hector (Aberdeen, N.)
Price, J. T. (Westhoughton)


Bottomley, Rt. Hon. A. G.
Hunter, A. E.
Price, Philips (Gloucestershire, W.)


Bowden, H. W. (Leicester, S.W.)
Hynd, H. (Accrington)
Pursey, Cmdr. H.


Brockway, A. F.
Irvine, A. J. (Edge Hill)
Redhead, E. C.


Brown, Thomas (Inoe)
Jay, Rt. Hon. D. P. T.
Reynolds, G. W.


Burke, W. A.
Jenkins, Roy (Stechford)
Rhodes, H.


Butler, Mrs. Joyce (Wood Green)
Johnson, James (Rugby)
Rogers, George (Kensington, N.)


Champion, A. J.
Jones, David (The Hartlepools)
Ross, William


Collick, P. H. (Birkenhead)
Jones, J. Idwal (Wrexham)
Skeffington, A. M.


Cronin, J. D.
Jones, T. W. (Merioneth)
Slater, Mrs. H. (Stoke, N.)


Crossman, R. H. S.
King, Dr. H. M.
Smith, Ellis (Stoke, S.)


Davics, Ernest (Enfield, E.)
Lawson, G. M.
Soskice, Rt. Hon. Sir Frank


de Freitas, Geoffrey
Lever, Leslie (Ardwick)
Sparks, J. A.


Diamond, John
McAlister, Mrs. Mary
Spriggs, Leslie


Dodds, N. N.
McCann, J.
Stewart, Micael (Fulham)


Ede, Rt. Hon. J. C.
MacColl, J. E.
Stonehouse, John


Foot, D. M.
MacDermot, Niall
Strachey, Rt. Hon. J.


Forman J. C.
McInnes, J.
Stross,Dr.Barnett(Stoke-on-Trent,C.)


Gordon Walker, Rt. Hon. P. C.
McKay, John (Wallsend)
Thomson, George (Dundee, E.)


Greenwood, Anthony
Mallalieu, E. L. (Brigg)
Thornton, E.


Grey, C. F.
Mellish, R. J.
Ungoed-Thomas, Sir Lynn


Griffiths, William (Exchange)
Mitchison, G. R.
Warbey, W. N.


Hannan, W.
Moody, A. S.
Weitzman, D.




White, Mrs. Eirene (E. Flint)


Hayman, P. H.
Neal, Harold (Bolsover)
Williams, W. R. (Openshaw)


Healy, Denis
Noel-Baker, Francis (Swindon)
Willis, Eustace (Edinburgh, E.)


Herbison, Miss M.
Oram, A. E.
Wilson, Rt. Hon. Harold (Huyton)


Hilton, A. V.
Owen, W. J.



Hobson, C. R. (Keighley)
Padley, W. E.
TELLERS FOR THE AYES:


Houghton, Douglas
Parker, J.
Mr. Pearson and Mr. Deer.




NOES


Agnew, Sir Peter
Brooman-White, R. C.
Godber, J. B.


Aitken, W. T.
Bryan, P.
Graham, Sir Fergus


Alport, C. J. M.
Burden, F. F. A.
Green, A.


Amery, Julian (Preston, N.)
Carr, Robert
Gresham cooke, R.


Amory, Rt. Hn. Heathcoat (Tiverton)
Cary, Sir Robert
Grimond, J.


Arbuthnot, John
Chichester-Clark, R.
Grimston, Hon. John (St. Albans)


Armstrong, C. W.
Clarke, Brig. Terence (Portsmth, W.)
Grosvenor, Lt.-Col. R. G.


Ashton, H.
Conant, Maj. Sir Roger
Gurden, Harold


Atkins, H. E.
Cooper, A. E.
Harrison, Col. J. H. (Eye)


Baldwin, Sir Archer
Cordeaux, Lt.-Col. J. K.
Heald, Rt. Hon. Sir Lionel


Bainiel, Lord
Corfield, F. V.
Heath, Rt. Hon. E. R. C.


Barber, Anthony
Craddock, Beresford (Spelthorne)
Henderson-Stewart, Sir James


Barlow, Sir John
Cunningham, Knox
Hesketh, R. F.


Barber, John
Currie, G. B. H.
Hinchingbrooke, Vitcount


Batsford, Brian
Dance, J. C. G.
Hirst, Geoffrey


Bell, Philip (Bolton, E.)
Davies,Rt.Hon.Clement(Montgomery)
Hobson, John (Warwick &amp; Leam't'n)


Bidgood, J. C.
D'Avigdor-Goldsmid, Sir Henry
Holland-Martin, C. J.


Biggs-Davlson, J. A.
Deedes, W. F.
Holt, A. F.


Bingham, R. M.
Dodds-Parker, A. D.
Hornby, R. P.


Bishop, F. P.
Doughty, C. J. A.
Hornsby-Smith, Miss M. P.


Black, Sir Cyril
Erroll, F. J.
Howard, Gerald (Cambridgeshire)


Body, R. F.
Finlay, Graeme
Howard, John (Test)


Bonham Carter, Mark
Fletcher-Cooke, C.
Hughes Hallett, Vice-Admiral J.


Bowen, E. R. (Cardigan)
Gammans, Lady
Hughes-Young, M. H. C.


Boyd-Carpenter, Rt. Hon. J. A.
Garner-Evans, E. H.
Hylton-Foster, Rt. Hon. Sir Harry


Boyle, Sir Edward
Glover, D.
Irvine, Bryant Godman (Rye)


Brewis, John
Glyn, Col. Richard H.
Johnson, Dr. Donald (Carlisle)




Johnson, Eric (Blackley)
Nabarro, G. D. N.
Simon, J. E. S. (Middlesbrough, W.)


Jones, Rt. Hon. Aubrey (Hall Green)
Nairn, D. L. S.
Smithers, Peter (Winchester)


Kerr, Sir Hamilton
Neave, Airey
Spearman, Sir Alexander


Lambton, Viscount
Nicolson, N. (B'n'm'th, E. &amp; Chr'ch)
Steward, Sir William (Woolwich, W.)


Leather, E. H. C.
Noble, Michael (Argyll)
Summers, Sir Spencer


Linstead, Sir H. N.
O'Neill, Hn. Phelim (Co. Antrim, N.)
Taylor, Sir Charles (Eastbourne)


Lloyd, Maj. Sir Guy (Renfrew, E.)
Osborne, C.
Teeling, W.


Longden, Gilbert
Page, R. G.
Tiley, A. (Bradford, W.)


Loveys, Walter H.
Pannell, N. A. (Kirkdale)
Vickers, Miss Joan


Lucas, Sir Jocelyn (Portsmouth, S.)
Partridge, E.
Wade, D. W.


Lucas-Tooth, Sir Hugh
Peel, W. J.
Wakefield, Edward (Derbyshire, W.)


Macdonald, Sir Peter
Pilkington, Capt. R. A.
Wall, Patrick


McLaughlin, Mrs. P.
Pitman, I. J.
Ward, Rt. Hon. G. R. (Worcester)


McLean, Nell (Inverness)
Pott, H. P.
Ward, Dame Irene (Tynemouth)


McMaster, Stanley
Powell, J. Enoch
Webster, David


Macpherson, Niall (Dumfries)
Price, David (Eastleigh)
Whitelaw, W. S. I.


Madden, Martin
Prior-Palmer, Brig. O. L.
Williams, R. Dudley (Exeter)


Manningham-Buller, Rt. Hn. Sir R.
Redmayne, M.
Wills, Sir Gerald (Bridgwater)


Marlowe, A. A. H.
Ridsdale, J. E.
Wilson, Geoffrey (Truro)


Maudling, Rt. Hon. R.
Robinson, Sir Roland (Blackpool, S.)



Mawby, R. L.
Roper, Sir Harold
TELLERS FOR THE NOES:


Maydon, Lt.-Comdr, S. L. C.
Ropner, Col. Sir Leonard
Mr. Legh and Mr. J. E. R. Hill.


Medllcott, Sir Franh
Sharples, R. C.

New Clause.—(INVALID VEHICLES.)

In paragraph (g) of subsection (1) of section seven of the Vehicles (Excise) Act, 1949 (which exempts from duty invalid vehicles which do not exceed five hundredweight unladen), the word "seven" shall be substituted for the word "five".—[Mr. Ridsdale.]

Brought up, and read the First time.

11.0 p.m.

Mr. Julian Ridsdale: I beg to move, That the Clause be read the Second time.
I hope that this new Clause will not detain the Committee for more than a very short time. Its object is to help those people who use the newer type of invalid chair, which is about 105 1b. heavier than the earlier model and by virtue of its extra weight does not conform with Section 7 (1, g) of the Vehicles (Excise) Act, 1949, which exempts from duty invalid vehicles which do not exceed 500 1b. unladen. The weight of these invalid chairs has been increased by 105 1b. because of the new design which brings more comfort and greater safety to their users. An automatic clutch and automatic transmission have been introduced.
Because of these changes the new carriages do not conform with the present legal definition of invalid carriages. This means that the owners of these vehicles cannot take them out with a Group L driving licence and have to pay £5 a year Road Fund tax because of the extra weight in the design. These cars are bought by invalids quite extensively out of their own resources.
I am sure that it would be the wish of both sides of the Committee to help these invalids as much as possible. I suggest that the best way we can do this

is to help them as they have been helped in the past and to raise the limit of exemption from paying tax. I have suggested a limit of 7 cwt. although I realise that 6 cwt. would cover the present position. It is simply that I want to make sure that we do not have to bring in amending legislation if there should be any alteration in design.
I wish to help those invalids who are buying the new chairs now. The change is one which could be made at very small expense to the Treasury. I assure the Committee that the new Clause is well worth accepting and would be a means of giving a tax remission to a very deserving section of the community.

The Joint Parliamentary Secretary to the Ministry of Transport and Civil Aviation (Mr. Richard Nugent): I can help the Committee, because I can substantially accept the principle of the new Clause which has been moved by my hon. Friend the Member for Harwich (Mr. Ridsdale). It is true that in recent years, due to various technical improvements in invalid carriages, the weight has risen above the 5 cwt. originally laid down in the 1930 Act. The result is that as my hon. Friend has said, the total additions now amount to about 105 1b. The new limit suggested by my hon. Friend of 7 cwt. is rather more than is needed. A 6-cwt. unladen weight would be sufficient to meet the case, as my hon. Friend himself recognises.
If the Committee is agreeable, I will ask my hon. Friend to withdraw his new Clause on the understanding that, on Report, we will put down a new Clause which will raise the limit of the unladen


weight to 6 cwt. and so give effect to my hon. Friend's intention.

Mr. H. Wilson: The whole Committee will be glad to hear the accommodating spirit of the Government. We could have got a lot further a lot earlier had they been equally accommodating on some more important new Clauses earlier in the day. When we on this side saw the new Clause in the name of the hon. Member for Harwich (Mr. Ridsdale) we thought it was a good proposal and we compliment him on his decision to put it on the Notice Paper. I may even encourage him—or discourage him: I do not know—by telling him that if it had not been accepted, we would have helped him by forcing the matter to a Division, but whether he would have been with us in the Lobby I do not know. However, that does not arise.
We are glad that the Government have been accommodating. This enables us to dispose of the new Clause with even greater speed than might otherwise have been possible. I am sure that I join with the hon. Member for Harwich in thanking the Joint Parliamentary Secretary for so clearly and readily accepting the Amendment.

Mr. Ridsdale: I thank the right hon. Member for Huyton (Mr. H. Wilson) for what he has said and my hon. Friend the Joint Parliamentary Secretary for accepting the principle of the Clause. I beg to ask leave to withdraw the Motion.

Motion, and Clause, by leave, withdrawn.

Mr. Amory: I beg to move, That the Chairman do report Progress and ask leave to sit again.
The Committee has got through a good deal of work today and this seems to me to be a reasonable hour for hon. Members of the Committee to retire to

rest. I own that we have not got quite as far as I would have liked tonight, but all the same, I think it would be a good plan for us to acknowledge that we have made substantial progress today in an agreeable atmosphere. I suggest, therefore, that we might now adjourn tonight and meet again on the Bill on Monday full of vigour and, I hope, also full of a determination that we shall complete our labours at a reasonable hour that day.

Mr. H. Wilson: In supporting the Chancellor's Motion, I also hope that on Monday we shall meet in a spirit of greater accommodation than the right hon. Gentleman has shown in the earlier stages of this debate. I agree with the right hon. Gentleman that we have made substantial progress today, more than in many past years for a long time, but I also agree with him that we have not made as much progress as some of us hoped we would at the beginning of the day. That was due to the rather long debate we have on Entertainments Duty. Whatever the rights and wrongs of that issue, it is a matter which involved many constituencies and, accordingly, many hon. Members wanted to make speeches.
I do not see any reason why, on Monday, the new Clauses should not be dealt with with reasonable despatch. The majority are in the names of hon. Members opposite and members of the Liberal Party. They raise important questions and I hope that they as well as those in the names of hon. Members on this side of the Committee will be dealt with reasonably quickly. Without looking too far ahead, it is probably the hope of hon. Members in all parts of the Committee that we can end the Committee stage on Monday at a reasonable hour. I can tell the Chancellor that, at any rate, that will be our hope.

Question put and agreed to.

Committee report Progress; to sit again upon Monday next.

Orders of the Day — ADMIRALTY CONSTABULARY

Motion made, and Question proposed, That this House do now adjourn.—[Mr. E. Wakefield.]

11.11 p.m.

Miss Joan Vickers: I am very grateful to you, Sir, for having selected this important subject for the Adjournment debate tonight, for it deals with gallant men who have served their country well. The Admiralty Constabulary is recruited from the Royal Marine Police, Admiralty civil servants, mostly ex-Royal Navy, and the Royal Marine Special Reserve. As my hon. Friend the Civil Lord knows, there are many anomalies in the recruitment of these people. I shall not go into detail, as time is limited, but they are all people who are affected by what I shall say.
I understand that on 7th February, 1958, a letter was received from the Admiralty by the general secretary of the Admiralty Constabulary Officers' Association saying:
… the strength of the Admiralty Constabulary has been falling fairly steadily over eighteen months or more, keeping in step with the reduction in commitments.
No recruiting has gone on since 1956.
… as a result of 'Way Ahead' investigations and the long-term Defence Review, and other economies which must be made, they have come to the conclusion that it will not be possible to achieve the required reductions in numbers without supplementing normal wastage, either by lowering the normal age for retirement, or by discharging younger men on grounds of redundancy.
I understand that there are 900 men under the age of fifty and that the Admiralty decided against discharging them because in ten to fifteen years the Force would have become uneven with too few experienced men.
Therefore, the Admiralty decided to discharge men past the minimum retiring age. A rough guide was given to the men up to the year 1963. I understand that the figures are as follows: the present state of the Force is 2,300; it will go down to 2,080 in 1960 and to 1,880 in 1961, and by 1963 may be 1,600. The Association is particularly worried about this sentence in the letter:
The retirement age will be reviewed again at frequent intervals, with the object of establishing as soon as possible whether any

further lowering of the age will be necessary during 1959, and I will let you know the result as soon as a decision is taken.
Everything is still very uncertain. The letter ended:
I am sorry to insert a note of urgency. We must start action in the next week or two, and give the men immediately concerned as much notice as possible.
The letter was sent to the men on 7th February and I understand that notices were dispatched on 17th March, which is very short notice. The whole Force is to be reduced from 3,500 to approximately 1,600.
I suggest first that the Force is being wound down too quickly. Consideration was given to an 80-hour fortnight working shift instead of the present 88-hour fortnight working shift. This will enable more men to stay on. Secondly, compensation should be given to the men who had not anticipated being retired until they reached the age of 65, and finally, in view of the fact that extra men are being recruited, those who are living in Admiralty accommodation should be allowed to remain there if they wish, as they would have great difficulty in getting other accommodation. I would suggest that they should remain on the basis of paying similar rent to that operating in the local authority area in which they happen to be. The normal wastage of men is about 50 a quarter, and therefore the Admiralty want an extra 50 above the normal to achieve the 250 wanted at the present time. The lowering of the age as proposed by the Admiralty means the dismissal of between 80 and 90 men.
On 14th February, 1958, there was a meeting of negotiating teams, which was adjourned to 18th February. I consider that the Constables' Association took a reasonable attitude. They said they had anticipated action by the Admiralty. I am therefore asking tonight for some definite, fair compensation. A letter was received on 1st April from the Treasury, stating:
The position of the staff who at the age of 60 years have less than the 20 years' service is dealt with by persuading them if possible to complete 20 years' reckonable service is dealt with by enabling them if possible to complete 20 years reckonable service. But where it is not considered possible to do so, there is no entitlement to superannuation allowance other than reckonable service at the date of retirement.


I suggest to my hon. Friend that these men, through no fault of their own, are being deprived of their anticipated retirement pension. They are not eligible for the old-age pension until they are 65. In a
further statement from the Admiralty, No. CE 58238/ 252/ C.E.B. 1955, it is stated:
An officer who has not completed 20 years' service reckonable for superannuation purposes at the age of 60 years, and who is fit and efficient, may, if he wishes, and subject to the needs of the Department, remain in his existing grade until he has completed 20 years' service, or reached 65 years, whichever is the earlier.
Men reaching retirement at 64 have no hope in most areas of getting employment. Therefore, I think compensation could be paid under clause BR 2102 (Part 2) of the Management Code.
There have, I understand, been three meetings with the Association of Chief Constables and members of CE IV. The Association opposed the scheme from the beginning and said that they thought it was unfortunate that there was no consultation before the letter of 7th February was sent notifying the changes. Therefore, the position of the men between the ages of 60 and 65 is still uncertain. It was put forward by the Association that they should get consideration on the lines of the prison warders, who, I understand, have a maximum age of 60 years. If they serve after 55 they can count the extra years as payable in reckoning their pension. This was
put forward by the Association, but I understand that it was turned down as not being a practicable suggestion. They did not consider there was an analogy between this situation and that of the prison warders.
Therefore, as no notice was given to the Association and no discussions took place before the first letter went out, and, owing to an unfortunate accident to one of the permanent secretaries, negotiations became very protracted, no one could get a clear understanding on whether the suggestions that the Association put forward would be accepted, and the whole matter was considerably delayed over a period of months.
They asked if they could see the Board of Admiralty, and I regret very much that this request was not granted. They were not allowed to meet the

Board of Admiralty, although I think they had a right in view of all the circumstances—for there is to be a cut of 700 men—to put their views forward.
Many of these constables had planned their lives on the basis that they would retire at the age of 65. Many of them have mortgage commitments and quite a number of them find themselves in considerable difficulties. As I mentioned before, they will be unable to get another job. Therefore, I should like my hon. Friend the Civil Lord to consider giving them compensation which, I believe, he may be able to do under B.R.2103 in which it is stated:
Compensation allowances for abolition of office.
I am going to suggest that the offices
which these men held have been abolished, anyhow as far as they are concerned. A great many places have been shut down and therefore no further people will be put into those offices. I believe that under Section 6 of the Superannuation Act, 1909, a civil servant who is retired in consequence of the abolition of office on reorganisation by which greater efficiency and economy can be effected, can be awarded reasonable and just compensation not exceeding the amount of pension or gratuity for which his service qualifies him.
I think we can prove tonight that the offices formerly occupied by these men have been entirely swept away and that many establishments have been closed. Should my hon. Friend the Civil Lord be inclined to take action on the lines of the various suggestions I have made, I hope that he will then consider awarding these men, who have, in my opinion, given really magnificent service not only in the Admiralty Constabulary, but also in their former occupations in the Royal Marines or in the Royal Navy, compensation based on the pay which they would receive anyhow up to their final year of service when forced to retire. Now, I gather, they will not even get that.
The Admiralty has been very generous to other Service men, and I would like to suggest to my hon. Friend tonight that he will be treating these men very harshly and with less justice than the other members of the Service if he does not see that they get equal compensation so that in retirement they


will not have to go on the dole for a number of years or live in considerable difficulty through lack of consideration being given to them and because, through no fault of their own, the Admiralty has many commitments and has done away with their services. I hope that my hon. Friend will consider sympathetically the points I have made.

11.23 p.m.

Mr. A. G. Bottomley: I am grateful to the hon. Lady the Member for Plymouth, Devon-port (Miss Vickers) for kindly affording me the opportunity to join in making a plea to the Civil Lord that these constables employed by the Admiralty should receive as generous treatment as possible.
My points will be few, mainly because I know that there are other hon. Members who sit for dockyard towns who also have an interest. They happen to sit on the Government side. It is the Government who can do something about this matter, and, therefore, I feel that any pressure which hon. Gentleman opposite can bring to bear on the Civil Lord will influence him much more than a plea from myself as a Member of the Opposition.
I also had correspondence from the Admiralty Constabulary Association. Normally I take the view that matters of this kind are best handled by the Association or by the trade union concerned. Had this communication come from one of the constables as a constituent I should have referred the matter to the Association. But now, in fact, it is the Association which is asking Parliament to intervene, and I give all the support I can to the case so eloquently pleaded by the hon. Lady. The points which she made are worthy of consideration.
At present, these men are working rather long hours and the suggestion has been made that they might work more reasonable hours so that more can be employed.
Then there was the question of compensation. This is a matter on which I feel very strongly, particularly in view of what has happened in recent months. We all remember the case of the British Aluminium Company, which was taken over by other interests. Lord Portal was called upon to retire and received thousands of pounds as compensation for loss of office. What is good enough for those who manage industry is good

enough, too, for those employed in the ordinary way as labourers or constabulary, or whatever their form of employment may be. I think there is a case for meting out compensation to these constables who are displaced. I would say that this goes for all who work in the dockyard towns who may be displaced, either by the closing of dockyards or by redundancy, which, as the Civil Lord knows, is bound to happen at Chatham because of the run down of the Navy.
It is a reasonable plea, if some of these displaced constables happen to be discharged when they had expected to be kept on till they reached the age of 65 and whose homes are there, that they should not be turned out into the streets. There ought to be reasonable arrangements for them to continue to live in their present homes, at least till they can make other and satisfactory arrangements.
We had a debate this week on national superannuation. It is recognised that we are reaching the stage in our society where there are many old people, and we have rightly said that we do not want the young to be worked to death to keep the older members of the population. The Government ought to practise what they preach and set an example. Here is a chance for them to set an example.
These men should be kept on till full retirement age, not necessarily as constables, if there are too many; but they ought to be employed in some way and not thrown on the scrapheap.
This highlights what has been happening over recent months. The Government have enabled a policy to be followed whereby men advancing towards retirement age, in the coal mines, on the railways, in the dockyards and elsewhere, are dismissed but cannot register as unemployed. There are thousands of these people who really are unemployed, and if they were added to the number of registered unemployed the figure of unemployment in the country would be truly shown to be higher than the Government figures record.
I do plead with the Civil Lord to do all possible to meet the request of his hon. Friend the Member for Devonport, a request which, I am sure, will be supported by other hon. Members who represent, as I do, dockyard interests.

11.27 p.m.

Sir Jocelyn Lucas: I rise to support my hon. Friend the Member for Plymouth, Devonport (Miss Vickers). If men are retired before the proper time, perhaps without the full pension which they would normally receive, it may well cause very great hardship. If there be plenty of employment they may get other jobs, but if there is not, or if there is any unemployment at all in their district, then it is very hard for them, as it is hard for anybody over 60, to get jobs. A man may get a job in some position of trust as a watchman or something like that, but he will not get the same rate of pay.
It does seem that special help should be given to try to see that all these men get a job and, if they cannot get a job, get some compensation to make up for what they have lost. They may be paying instalments upon their houses or upon washing machines or any of these modern luxuries, and will be put into very great hardship by being prematurely discharged from positions which they had every right to believe they would hold till they were 65. I hope the Government will do their very best to see that something is done to put this matter right.

11.28 p.m.

Brigadier Terence Clarke: I should like to support my hon. Friend the Member for Plymouth, Devonport (Miss Vickers) and my colleague my hon. Friend the Member for Portsmouth, South (Sir J. Lucas). I think that if these men had a really strong union, something like the Electrical Trades Union referred to by the right hon. Gentleman the Member for Rochester and Chatham (Mr. Bottomley)—he said they had a union—the Civil Lord would be very worried and would not have come here tonight but would probably have given way long ago. I want him to look at this generously and to remember that this small body of men are all ex-Service men and deserving of something better than suddenly being put on the rubbish heap two years before they get the old-age pension. If they were labelled officers or ex-officers they would, I am sure, have got golden bowlers and gratuities and, perhaps, an additional pension. Perhaps he will tell the First Lord how well he has done for the rest of the Navy, and persuade

him to do as well for the Admiralty Constabulary. I hope that he will tell us tonight that he will make every effort to persuade the First Lord in this matter.

11.30 p.m.

The Civil Lord of the Admiralty (Mr. T. G. D. Galbraith): It is always a pleasure to follow my hon. Friend the Member for Plymouth, Devonport (Miss Vickers) in a debate. As is usual, she has presented her case very reasonably and with great charm, and she has had the benefit of the support of several other Members representing dockyard constituencies, which has widened the scope of the debate. Her main charge has been not so much of any lack of efficiency in the Admiralty Constabulary as of the way in which the rundown has been handled by the Admiralty. Because of this I would like to give the background to this rundown.
Two processes have been at work. First, the use of modern police techniques has enabled manpower complements to be reduced and, at the same time, efficiency to be increased. The second process—to which my hon. Friend referred—has been the reduction in the shore support of the Navy which followed the 1957 Defence White Paper and the work of the "Way Ahead" Committee. Thus, at one and the same time the number of establishments for the constabulary to guard has been reduced and the number of men required to guard those establishments
which remain has declined. Faced, therefore, with this problem of a declining manpower requirement in the Constabulary, what was the Admiralty to do? That was the problem.
My hon. Friend has suggested that we might have left the matter to what she would call normal wastage. I only wish it had been possible for us to do this. In round figures, the facts are more or less as she stated. The rundown has been from approximately 3,100 to 1,600 —a reduction of 1,500 posts. Normal wastage and retirement would have provided only 1,000 of these, so that if my hon. Friend's plan had been followed it would still have left a gap of 500, which would have to have been dealt with by some other means. Furthermore, in order to obtain these figures it would have been necessary to impose a complete ban on recruitment.
Such a policy would have been absolutely impracticable, because of its effect on the age structure of the force. We must not have too many elderly men in the police force—this meets a point raised by my hon. Friend—because the police force has to perform many active duties, such as fire-fighting, to say nothing of foot patrols in all kinds of weather in isolated parts of the country. To be efficient any police force requires a constant influx of new blood, and this is particularly true of a force such as the Admiralty Constabulary.
I am not certain if we have not already gone too far in this process of curtailing recruitment. At present, 70 per cent. of the force is over 50 years of age, and that is rather on the high side for a properly balanced force. Technically it would have been possible for us to carry out the rundown much more speedily, and if we are open to criticism we should be criticised not for acting too quickly but rather for going too slowly. However, in the circumstances we thought it right to phase the reductions over a period, so we have spread the rundown over eight years in order to reduce personal hardship and disturbance to a minimum consistent with the maintenance of an effective police force.
My hon. Friend has spoken very movingly about the hardships which may be caused by a rundown such as this, and I have the greatest sympathy with the men who have been affected by the rundown. It is probably no consolation to them to know that they are not alone and that there are many other employees of the Admiralty, both industrial and non-industrial, in the dockyards and elsewhere, who are in exactly the same position due to the contraction of the Navy.
When I announced the closures of naval establishments following the defence review in February, 1958, I think that the news was generally welcomed by the House as a justifiable means of saving money and increasing the efficiency of the Fleet, and I must ask my hon. Friends and the right hon. Member for Rochester and Chatham to look at this problem of the Admiralty Constabulary in the wider context and to realise that if we are to have the benefits of increased efficiency and all possible economies we have to face the sort of difficulties which we are discussing tonight.
My hon. Friend has made a plea that those who are discharged before reaching the age of 65 should have some sort of special gratuity or compensation paid to them. As I am sure she knows, public servants have no guarantee of employment beyond the age of 60 and it is no within the Admiralty's discretion to alter in any way the pensions and gratuaties which are paid on retirement. They are all laid down in the various superannuation Acts, and any change in these Acts would involve legislation, which it would be inappropriate to discuss in an Adjournment debate such as this.
The only thing that the Admiralty could do would be to keep on men that it no longer required. This would not only be costly and inefficient but it would prevent recruitment for a number of years, and, with the best will in the world, as I have said, we simply could not contemplate this.
My hon. Friend also suggested that, quite apart from the merits of the rundown, we should not have started it without much more discussion and advance notice to the men concerned. That was another main point which she made. Although the rundown started in 1955, it was not found necessary to begin premature retirements until June, 1958, because of the fact that we had stopped recruitment in the meantime. When premature retirements could no longer be avoided the staff associations were told in February and exhaustive discussions took place. In fact, between February and September, no fewer than five meetings were held, including one under the chairmanship of the Permanent Secretary, and although the rundown continued while these negotiations were proceeding, the staff associations were assured that any alterations made as a result of the negotiations would be given retrospective effect. I do not think that my hon. Friend can fairly claim, therefore, that the staff associations have not been kept very fully in the picture. We have also been to great pains to give those who have retired early as much notice as possible of the retirement. In practice this is usually between three and six months and we allow those who have only a few months to serve before completing an extra year for pension to stay on in order to qualify for a higher rate of pension.
My hon. Friend the hon. Member for Portsmouth, South (Sir J. Lucas) also referred to the housing difficulties of those who are retiring and suggested that as we are running down the Admiralty Constabulary there ought to be houses to spare. Unfortunately, the position is not quite as simple as that. There are only 600 Admiralty houses available for Admiralty constables and as at the moment there are 2,200 constables, and even when we reach our target there will be 1,600 constables, it is obvious that there are not enough houses to do what he suggests. We recognise that there is a housing problem, however, and we will do what we can to help tenants who are experiencing difficulties in finding new accommodation.
My hon. Friend the Member for Devonport asked me to make a statement about our future policy. The main lines will be to continue the rundown which, I have described so as to achieve a total strength of 1,600 by the end of 1963. I am afraid that this will involve more retirements under the age of 65, but I do not expect that it will be necessary to lower the retirement age below 62. Meanwhile, we are starting a small

amount of recruitment later in the year in order to begin to bring the force back into a proper balance.
I trust that this debate will have helped to clear the air a little. I am afraid that I probably have not satisfied my hon. Friend entirely but I hope that I have satisfied the House that we are carrying out these reductions in as humane and considerate a manner as possible without jeopardising the contribution which a smaller police force can make to the new streamlined shore support of the Navy. That is the point. They have to play their part in this run down just as much as have other parts of the Navy.
I wish to conclude by paying a tribute to the spirit and morale of the Admiralty Constabulary, and to the excellent way in which it has responded to the challenges and problems of this difficult period. I am sure that the modern police force now being created will be a force that will worthily continue, and even improve on, the fine traditions of its predecessors.

Question put and agreed to.

Adjourned accordingly at nineteen minutes to Twelve o'clock.